Building business credit scores can help you get better terms from your vendors or more easily secure a business loan for expansion. However, if you’ve had to ask “how to fix my poor business credit,” struggled with paying bills on time, or filed for business bankruptcy, you may need professional credit counseling services to improve your credit scores for new business loans.
At Credit Score Revival (CSR), clients often wonder how to obtain or fix business credit to help secure business loans. Building business credit scores are similar to personal ones, and neglecting to build and maintain one can have similar consequences on your business.
Working towards fixing and establishing real business credit can be a complex process, but that’s where the CSR team can help. You’ll need to pull the credit report for your business and check each derogatory mark for accuracy. This information helps identify areas where you can quickly improve credit scores for your next business loan.
Your business credit score is established by paying your bills on time and demonstrating the creditworthiness of your business. When you apply for business loans, repay them on time and make sure you understand how to be compliant with the terms of all payments. You’ll also want to establish a line of credit if you’re just starting to prove that you’re worthy for the lender to extend more credit, which can fix business credit.
If you’re a new business or recovering from some financial hardships that have negatively affected building your business credit, you may need to start small when obtaining business credit. Vendors may be unwilling to extend credit unless you put down a deposit or may only take cash on delivery. To build your business score and fix business credit, make sure to make your payments on time and early, if possible. You may also wish to revisit your revolving open lines of credit, reducing them.
When business owners want help obtaining business credit, they may start to reach for the quickest and easiest shortcuts to see improved scores. While you may think that there’s a shortcut to help repair your business credit score correctly, building business credit often takes time, diligence, and patience. Keep your accounts open since the longevity of each available line of credit — especially those in good standing — is one thing that can improve your credit score.
You have additional options for figuring out the best way to fix your business credit scores. One common method is to encourage your vendors to provide a trade reference for you to other suppliers — make sure that you’re not causing a conflict of interest with the vendor. You want to ensure you treat those new lines of credit carefully by paying your bills on time and not maxing out your credit limit. If you have past due accounts, call the creditors directly, and see what terms they’re willing to take to work out the debt. A past-due account remedied directly with a creditor looks better for your business credit score scale.
Most people are familiar with the 300-850 personal credit score scale used by the major credit bureaus. However, the scale for people looking to obtain business credit has some major differences. The business credit score scale ranges from 1 to 100, with 100 being the best. The credit score indicates how likely a business is to remain solvent and pays its debts. While 80 is considered the cutoff for a good business credit score, even a score of 70 is decent.
A professional business credit builder service like CSR can help struggling businesses discover how to identify ways to improve their standing and apply for business loans.