Having a high business credit score is beneficial if you want to get favorable terms on credits and loans. Therefore, a business credit score is a primary determinant that most lenders use to approve your loan. It helps to buy insurance, establish supplier relationships, among other things. Hence, focus to build your business credit score and be aware that when you declare bankruptcy as a business owner, it is a red flag to potential lenders and a main credit score killer. If it is a challenge for you, you can consult companies that help build business credit for small businesses. Below you will learn ways to maintain a good business credit score.
Pay your bills on time
This is important if you want to maintain a high business credit score. Plus, you should not do it just once but every time. Where possible, pay your bills ahead of time. When you are regularly late on your payments, it will impact your credit score and make it drop. Besides, it will be detrimental when you need to get a line of credit or a business credit card. Although business scoring formulas are different, you will always score better when your bills are paid on time and even achieve the best maximum score when you pay in advance.
Keep your personal credit intact
Business experts always recommend keeping your personal and business credit separate. As much as this is helpful, it can be critical when you ignore one as it can affect the other. Like in this case, a personal credit score can affect you getting business credit from lenders. Also, if both scores are low, you are at risk of getting no credit at all. Even where your business is making profits, they will always cancel the deal with you. In a case where your business is new and has no credit history or has a little history, your personal credit will be the determinant of the business credit cards you qualify for, thus keep your business credit intact to maintain your business credit score.
Choose suppliers and lenders that report to the credit bureaus
When you pay your suppliers and lenders on time always, it is a good reputation for your business. Nonetheless, it will not be beneficial to your business credit score if they will not report your good payment history to the credit bureaus. Therefore, always confirm with a supplier or lender before getting in a relationship with them if they report payment histories to the credit bureaus. So you can ask your clients or partners to submit the trade references. In this way, you will not only have your business credit score updated, but you will always maintain a high score.
Know where your business credit score stands
It is vital to stay on top of your business credit score. If you find it a challenge, you can pay for a business credit monitoring service. When you do this, you will always know what is happening to your business credit scores. Since as you take on debt, pay bills, and experience cash flow issues, your ratings and scores are impacted by all these. Therefore, by knowing what your business credit score is at all times when you bid on contracts, they will help to break or make your bid. Where you are sure your credit score is good, you do not have to pay for monitoring, and all you have to do is to ensure you maintain it at a high score. So maintain a good business credit score by knowing where your score stands to improve it or keep it consistently high.
Get a business credit card for daily expenses
Get a business credit card for daily purchases like utility bills, travel, and supplies. It is easy to boost your credit score with these as long as you make at least a minimum payment on time monthly. So a card is essential to cater to your business’s individual needs. It is a great option for small or recurring expenses. If you are a business owner and you travel frequently, a smart option is a card that rewards gas. The same applies to if you regularly entertain clients, a business credit card with cashback on dining is a better option.