Tips for Strengthening your Business Credit Score
December 23, 2022
Having a strong business credit score is important for any business owner. A good credit score can help you secure loans and lines of credit, get better terms on leases, and even improve your reputation with suppliers. Here are five tips for strengthening your business credit score:
- Establish a business credit profile: The first step to improving your business credit score is to establish a credit profile for your business. You can do this by applying for a D-U-N-S number, which is a unique nine-digit identification number assigned to businesses by Dun & Bradstreet. This number is used to track the creditworthiness of your business and is often required by lenders and suppliers.
- Pay your bills on time: One of the most important factors in determining your business credit score is your payment history. It’s important to pay all your bills on time, including credit card bills, loans, and leases. Late payments can have a major negative impact on your credit score.
- Keep your credit utilization low: Credit utilization refers to the amount of credit you’re using compared to the amount of credit you have available. It’s generally a good idea to keep your credit utilization as low as possible, ideally below 30%. This shows that you’re not over-extending yourself financially and that you’re managing your credit responsibly.
- Separate your personal and business finances: It’s important to keep your personal and business finances separate in order to establish a strong business credit profile. This means using separate bank accounts and credit cards for your business and avoiding co-mingling funds.
- Monitor your credit regularly: Finally, it’s important to regularly monitor your business credit score and report. You can do this by checking your credit report from the three major credit bureaus (Experian, Equifax, and TransUnion) and correcting any errors you find. This can help you catch any potential issues early and take steps to fix them before they have a negative impact on your credit score.
By following these tips, you can work to improve your business credit score and strengthen your financial foundation. This will make it easier for you to secure loans and lines of credit, get better terms on leases, and establish a good reputation with suppliers.