Good credit can make your life better, personally and for business. When you’re just starting up a business, personal credit ratings are important, but you need to be mindful of building up your business credit.
Rest assured, there are many ways you can improve your credit score. We’ve covered five of the quickest ways.
1. Know the key parts of a business credit score
Similar to personal credit scores, a business score is a number that tells others how your business manages its cash flow. In general, the main factors that go into your credit score are:
- How much debt do you have to current suppliers and lenders
- How much of your credit have you used up
- Your payment history
- Company industry and age
2. Separate Personal from Business
Open up a business bank account and a business credit card. Keeping your business finances separate helps you establish a history, as well as protecting your personal credit from being used during any business-related lending.
3. Pay early, or at least on time
A good credit score comes down to whether or not you can pay your bills on time. Sound simple enough? Paying your bills shows you can manage your payments, and paying them ahead of the due date can give your credit score a boost.
Keep ahead of those payments by setting up direct withdrawals, scheduling reminders on your phone, or setting up a routing to manage your cash flow. Your credit score will thank you.
4. Increase your credit limit, and use your credit
Showing that you can use credit and pay it back in a timely manner works in your favour, so use it more often, as long as you can pay it back. The more you can show that you’re financially responsible, the better. So this may mean opening another credit card to show you can manage credit properly.
You can also consider increasing your credit limit. This allows you to put more on credit all while keeping your utilization ratio low – which will do wonders for your score. And in case we haven’t stressed it enough, always pay on time.
5. Actively manage your credit report
Take accountability for your credit and actively manage your report. This means doing regular checks & managing what’s inside the report. Often times people will find errors on their report that can negatively (and unnecessarily) impact your score. You can even work with the credit bureaus like Equifax to leave old (paid off) debts on your report – showing a longer history of responsible credit use. Or you can work with the original creditor to remove recent late payments (which significantly damage your score) by asking for a goodwill adjustment, negotiating the removal or filing a dispute.
Stride Capital is here to help you to get into your next piece of gear, with the best financial product for you today and as your business moves forward. Contact us, start your application today or connect with our sales team today to get into the financing you need for you next piece of gear.