As a small business owner, you work hard to grow your business. Some days, you feel like the chief cook and bottle washer between all the duties that require your attention. Customers, vendors, employees, and marketing strategies are certainly important but don’t neglect the importance of your business credit. Here are four quick tips to boost your small business line of credit:
What is Business Credit, and Why is it Important?
You’re probably familiar with personal credit, how your FICO score impacts creditworthiness, and the terms you’re approved for. Business credit is similar, and creditors will look at your scores from Dunn & Bradstreet, Experian, and Equifax to determine the risk they face in lending to your business. One of the most significant is your Paydex score, which is rated on a scale from 0-100 and is something you can increase by applying a few quick tips.
4 Ways to Boost Business Credit
1. Make your payments on time and avoid any delinquency on your accounts. Perhaps this seems obvious, but this is one of the most essential factors of your business credit. Creditors want to know that you can and have paid back debts promptly.
2. Establish credit that’s tied to your business. Like the tip above, creditors want to see that you can responsibly manage credit cards or small business loans. Make sure that whoever you borrow from reports your information so you can benefit from a good experience.
3. Keep your debt low. While it’s a good practice to use revolving credit, keep the balances low compared to the limits. For example, try not to use all the available credit on a credit card. A low ratio can help boost your score.
4. Keep an eye on your business credit reports. You can find your reports from the three agencies: Dunn & Bradstreet, Equifax, and Experian. Be sure to check for accuracy because mistakes are sometimes made, and disputing an error can significantly impact your score.
Use the tips above to build and boost business credit to ensure your credit rating is strong and fulfills your business line of credit requirements. Good personal and business credit scores will help you get bigger loans and better terms. In today’s lending environment, you want every advantage possible when it’s time to borrow.