As a small business owner, you will need to acquire startup money to get your operations off the ground. This is often done by applying for business loans. Getting approved for a loan using your business credit score can be difficult, especially if your company is young. Before you begin the application process, use the tips provided below to help repair and boost your business credit score.
Check Your Credit Reports
Checking your credit report regularly can help you keep track of your purchases and monitor your credit score. There are several credit reporting tools you can use to keep track of your score without hurting it. Take advantage of these services and consider checking your reports weekly. Doing this can help you make better credit repair plans. Looking at these reports can also alert you to any fraudulent charges made on your account.
Be Patient and Make a Plan
When working to lower your credit score, it is important to remember that it will not happen overnight. Remind yourself that credit repair will take several months or years. Take some time to sit down and make a long-term plan to help you map out your timeline. Figure out exactly how much you can afford to pay each month and factor the amount in as part of your budget.
Submit Payments On Time
One of the most common reasons for a low credit score is the inability to make payments on time. Late or missing payments can lower your credit score and increase your minimum monthly payment requirements. Avoiding this is a matter of time management and organization. Identify the due dates for your credit cards and write them down on a calendar. You could also set a reminder on your phone to help you remember to submit your payments on time.
Avoid Transfering Card Balances
If you use multiple credit cards, you may be prompted to transfer all or a part of your balances from one card to another. Doing so may seem helpful, but it does not help you pay down your debts or improve your credit score in the long run. Instead, you should focus on paying off the debt you have by making consistent payments. It is wise to start by paying off one card at a time. Ideally, you should focus on the card with the lowest balance first.
Increasing your business credit can help you get approved for loans and secure working capital for your company. Use the ideas in this guide to help you get started.