Like the personal credit score, business credit score also plays vital role in business matters. Low credit rating of a business adversely affects its chances of obtaining credit with favorable terms and conditions. Often, poor credit score comes in the way of obtaining the best deal for your business. Anyways, here we list down some practical ways of credit repair for your business so that you can obtain the necessary credit required to meet your business needs.
Review your credit score
The first and foremost thing in any type of credit repair is to review the credit score. After carefully reviewing your business credit score, if you find that there are errors witch are hurting the score, take necessary steps to get those errors corrected. Presence of errors can limit the size of your loans and also can make the rate of interest higher.
Pay bills on time
One of the important determinants of business credit score is the timely payments of bills. If you default in making payments or if you are delinquent in making payments, it is likely that your credit score will be negatively hurt. Credit score for business ranges from 0 to 100. If your credit score is 80 or above, it implies that you are paying bills on time. If you pay your bills before the due date, credit score of your business receives a boost.
Pay off debts
If you as the business owner owe debts on multiple accounts, it hits your business credit score negatively. So, as the business owner, you need to put in serious efforts to pay off those debts. This will help a lot in improving your business credit score.
Obtain credit from recognized institutions
It is recommended that you must obtain credit from such a lender which reports to Paydex. This is the number one business credit reporting agency in the country. All the recognized credit institutions report to this agency. If your lender does not report to this business credit rating agency, it will not do any good to your business credit score.
Limit your debt level
Try to maintain a limit to your business debt at any point of time. The lower your business indebtedness, chances are higher that you will obtain a new credit.
Clean up your balance sheet
This is very important in improving your business credit score. For instance, if you own a business house and is planning to sell assets that are not fetching you returns, do not hesitate to sell it off. The proceeds that you have earned through selling assets, can be used to pay off your debts. This will in turn improve your business credit score.
By following the above mentioned tips, you can surely raise the credit score of your business.