A healthy business credit score is integral to securing trade credit and financing to help companies grow. If vendors, suppliers, and financial institutions are offering you less than satisfactory terms, consider ways of improving your score to make your business more creditworthy. Here are some tips to help you accomplish this.
Keep Personal and Business Finances Separate
To avoid mixing your personal and business finances, incorporate your business, or if you have a sole proprietorship, at least obtain an employer identification number, or EIN. Additionally, register your business with the appropriate government agencies and procure any necessary business licenses. These steps protect your personal credit from the vagaries of your business situation, and also enable you to track your business credit score as a separate entity.
Create Credit Accounts for Your Business
Establishing a credit history for your company entails creating separate measurable accounts for your company finances. Only through building a separate company credit history can you raise your business credit score. A manageable primary step is to get a business credit card. Be sure not to max out your credit; keep credit utilization ratios low. You can also open lines of credit with vendors, suppliers, and lenders that report your credit history.
Monitor Your Scores
Monitoring your business credit score regularly is essential and is not penalized in any way. Keeping an eye on your scores allows you to track your improvement. If there is any drop or discrepancy, contact the credit reporting agency immediately to discover any possible errors, and request corrections.
Pay Bills Promptly
An important factor in calculating your business credit score is your payment performance. To build a better score, always pay your bills on time, and if possible, pay them early. This is especially important with your major suppliers with whom you do regular business.
For more advice on raising your business credit score and other aspects of business finances, get in touch with Skybridge Capital Group.