To have better access to finance and credit from both lenders and suppliers, your business requires a positive and well-maintained credit rating. Besides, having positive and strong business credit ratings and scores are crucial to the growth of your business.
Below are 5 tips to help you maintain the positive business credit rating.
Keep your accounts updated
When you want to apply for a business loan or financing, the lenders will want to see your company’s financial reports. They will want up to date, accurate and orderly financial statements of your business. Attaching the most recent tax statements along with the most current monthly income reports is an added advantage in securing not just financing, but it’s also necessary for tax purposes. So, it’s in your business best interest to have your accounting books kept updated and orderly.
Check your business credit reports and correct mistakes
Being aware of your business credit reports is perhaps one of the best ways to build and maintain a positive credit score and rating for your business. Make it your habit to regularly inspect your company’s credit reports and correct any possible registered errors there and then.
Always remember that a positive and well maintained credit score positions your business high, in addition to offering it easier access to business loans and office leasing at low interest rates.
Positive personal finance
When you have just started a business, but you have inadequate financial information about your company, many lenders are most likely to review your personal finances. If you have a positive personal credit history, then you increase your chances of credit approval by lenders. But if you have multiple unsuccessful credit applications, it will be difficult for your business to have access to loans in the future.
Increase Your Credit Limit
One way to improve and maintain your business’s credit score is to increase your credit limits. You can request for your credit limit increase usually after the first six months of opening a credit account. Having your credit limit increased lowers your credit utilization ratio. This is beneficial as it will ultimately improve your business credit score and rating.
Avoid mixing personal and business finance
It always important to categorize your accounts correctly. Open your business accounts using your EIN (Employee Identification Number), and not using your Social Security Number (SSN). Separating personal and business finances helps to maintain good credit score for both of your accounts. If by any chance your personal credit score is poor, it may affect your business score when you mix them.
While you are making your best efforts to grow and maintain your business credit score, ensure that you know the process is time-consuming. However, by raising and maintaining your credit score, you will be doing yourself and your credit a great service.