There are a lot of ways that businesses can get themselves into trouble with credit. Once the damage has been done, you need an action plan to resolve it. Without a good credit score working in their favor, they may face obstacles to achieving stable business growth. Qualifying for loans and showing your creditworthiness to investors or potential partners could become problematic when you’ve had issues with credit in the past. If you need to work on raising your business’ score, here are some of the most important things that you need to do to generate improvement.
Improve Credit Utilization
Credit utilization is one of the most important facets of credit repair. Taking out too much of your total available credit will drag down a score. You need to be conscientious about how much credit you’re drawing from your total credit on each individual line or card as well as how much of your total available credit from all of your outstanding credit lines. Get your limits increased but don’t utilize any of the additional amount that you have access to in order to maintain a favorable credit-utilization ratio.
Avoid Late Payments
One of the most common problems that brings business’ score downs is making late payments. It’s crucial that you make payments on time on each of your active tradelines. Even just a few days can make a difference when you’re making installment payments on a loan.
Also, paying a bill late could mean having to pay an extra fee. Having to pay a late charge for anything is a managerial red flag to anyone who’s looking at your financials with scrutiny.
Set up automatic payments for accounts that carry the same charge every month. It may not be a good idea to set payments that vary to autopay options. In case you have to dispute charges, you may have a harder time getting an adjustment to charges after you’ve paid them. Ultimately, you need to establish good systematic controls to ensure that every payment you make is on time and help you out with your credit repair efforts.
Monitor Your Score
Stay in the know about what’s happening with your business credit score. Mistakes are more common than you’d think, and you need to be ready to take corrective measures as soon as possible. Also, monitoring your score will help you which of your credit repair initiatives are having the biggest impact and which spending or payment activities still need improvement.