5 Steps to Successfully Building Your Business Credit
Although it’s possible to obtain a loan with poor business credit, there are numerous advantages to upping your credit score. A strong business credit rating helps you get more favorable interest rates, lower insurance premiums, and better terms with your suppliers. Additionally, potential clients are more likely to be drawn to your company if it has an impressive credit rating. Here are some steps you can take to build business credit.
Pay Creditors Promptly
When credit bureaus assess your business credit score, they pay close attention to your creditor payment history. To maximize your score, always pay creditors not only promptly, but early. Additionally, when using your business credit cards and lines of credit, keep your spending to within 20 to 30 percent of your credit limit.
Choose Lenders Carefully
Timely payments on small business loans can increase your business credit score. However, not all lenders report your prompt payments to business credit bureaus. Before you take out a loan, ask the lender if they report to credit bureaus.
Set Up Supplier Trade Lines
Another method of upping your business credit involves establishing trade lines with vendors of the supplies you need for your company and then asking these suppliers to report your on-time payments to business credit bureaus. Even if your suppliers are unwilling to report, use them as trade references.
Monitor and Update Credit Bureau Data
The three major credit bureaus that accumulate data and compile business credit scores are Experian, Equifax, and Dun & Bradstreet. These bureaus all have diverse methods of compiling data and calculating scores, so it is imperative that you monitor your basic profile and upload current financial statements to all three.
Maintain Clean Public Records
Besides accumulating data from your creditors, business credit bureaus consider any public records involving your business such as court judgments, liens, and bankruptcies. Keep payments to creditors up to date to avoid these negative blots on your record.
For more advice on building business credit, get in touch with Bull Market Capital Lending.