Business Credit: How to Improve Yours
Your business credit score is as important as your personal credit score. But many business owners don’t realize it until credit is needed. How can you build your business credit? Here’s what you need to know.
Multiple Credit Bureaus Have Different Criteria
Although business credit reports aren’t standardized across the industry, they do rely on the same basic elements. First and foremost is making on-time payments to your creditors. Dun & Bradstreet, Experian and Equifax are the three main companies that provide business credit reports. Your business report may include information about your creditworthiness, your business size and scope and other scores that tell a lender if your business is likely to fail or is a credit risk.
Monitor Your Credit Report
As with personal credit, it’s important to monitor your business credit for errors and fraudulent activity. Unlike your personal credit history, you’ll have to pay to get a business report. Look for accounts that you don’t recognize and errors about your business.
To build business credit and increase your score, you’ll want to pay off your accounts on-time or early. Check to make sure you don’t have liens or judgments against your business, which will affect your credit score. Make payments to vendors who do report your credit history. Business credit bureaus may look at the length of time you’ve had financial accounts. Longer aounts that are paid off can benefit your score.
You should also track your available credit limit with business lines of credit and credit cards. Be cautious about overextending your credit, because that can lower your score. Balances on outstanding loans may affect your score. Be sure to keep up with payments on any loans.
Royalty Business Lending has financing options for businesses. Let us help you build your business credit score and your business by providing funding that will let you grow.