Dealing with credit can be challenging for businesses, especially small business owners. Small enterprise owners have limited financial resources, which makes it challenging for them to qualify for bank loans. And with a bad credit, this situation aggravates even further.
If you are a small business owner with poor credit, the following credit repair strategies can help you:
Make timely payments
Rule number one: make early or timely payments to creditors. Different credit bureaus have varying methods of calculating your business credit score. However, all bureaus take into account your history of paying creditors. It is, therefore, advisable to pay your creditors on time or, even better, early in order to improve your business credit score.
Lenders that report to credit bureaus
Borrow from lending institutions that report to credit bureaus in order to enhance your business credit. But, remember to make your payments on time. Banks report to credit bureaus. But, your business won’t qualify for a small business loan due to bad credit. In such a situation, your best bet is online small business lenders. They will be willing to lend you funds and report to credit bureaus.
Keep credit information current
TransUnion, Equifax and Experian are the three main business credit bureaus. These credit bureaus use diverse methods for calculating a company’s credit score. Your suppliers could check with any credit bureau. It is better to maintain current information with all three of them.
In a nutshell, check your business credit report and ask these bureaus to change or add any information necessary.
Monitor your expenses
As discussed earlier, make credit payments on time. Similarly, keep track of your credit and expenses. Focus on making a monthly budget and stick to it. Maintain good bookkeeping practices. Every late payment that you make will ultimately affect your credit score.
Maintain an impeccable public record
Coupled with paying creditors on time, keep your public record clean. Your business credit report has your company public records. This includes liens, bankruptcies, among other things.
Negative marks in your business credit report can have negative consequences for your firm. For instance, bankruptcy will stay on your Experian credit score for almost 10 years. Therefore, strive to keep a flawless public record in order to protect your business credit score.
In conclusion, having bad credit will make it difficult for you to obtain business loans. Follow these tips to make sure your credit score stays in shape.
If you would like to learn more about credit repair tips, click here.