Just as your life can be made easier with a good credit score, running your business can become easier with a good small business credit score. While you’re building your business, don’t neglect to take a few steps to slowly but surely improve your commercial credit score.
Work on Maintaining Lasting Relationships
Do your business’s credit score a favor by making sure each of your trade lines remains open for at least six months. The reason this is a good way to improve your small business credit score is that it shows you are capable of successfully maintaining a stable credit history and professional payment-related and business relationships. Whenever you have to approach lenders in the future, you’ll be able to successfully show you’re a small business client who can be trusted.
Break Your Payments Down Throughout the Month
Rather than waiting until the very end of the month to pay off your business credit card in full or make a payment on your business credit account, you and your business credit score will be much better off making weekly payments every Friday. This is an especially good piece of advice if you use your small business credit card several times throughout the week.
Remember that you’ll want to keep your debt-to –credit ratio as low as possible, which means keeping your total credit card balance as low as you possibly can from month-to-month.
Pay Your Credit Card Off in Full When Possible
While you might want to take care of other things in your business whenever you have a bit of extra money, consider paying off your business credit card in full if it’s at all possible. If you’re ever late on a card payment, you will more than likely be able to keep that debt from having a negative impact on your overall credit score by paying off your credit card balance in full. Despite what you might think, debt collectors are actually quite willing to work with you as long as you’re willing to make an effort to show you’re doing what you can to take care of your debt. Now you won’t have to worry about that late payment being reported to all of the major agencies. This tip also goes a long way in helping you to secure small business financing in the future.
No matter how busy you might be running your small business, you should always set aside time to work on improving your business’s credit score. You might not need a loan now, but consistently working on your credit score is sure to make the process easier and faster when you do need a loan.