If you find your business becoming rejected and denied for loans left and right, then chances are that your business’ credit score and history are to blame. Obtaining a copy of your current credit report will allow you to quickly see just how bad things have gotten, especially if you have an extensive list of negative accounts and activity within it. Fortunately, there are several effective ways that you can get the ball rolling in the right direction again and eventually improve your business credit score over time.
Identify and Rectify Your Errors
Although the vast majority of the information that is reflected within your business credit report is accurate, it is possible to have an abundance of errors in it, as well. Statistics has confirmed that 20 percent of American adults have at least one error in their report. More importantly, ten percent of consumers have at least one detrimental error that causes a decline in their credit score, according to CBS News.
On a personal level, the Fair Credit Reporting Act (FCRA) protects consumers from credit reporting woes; unfortunately, such luxury is not accessible by business. Indeed, there are no laws protecting business owners from unfair credit reporting.
Therefore, your first priority should be to identify these errors and have them corrected as soon as possible. This can simply be done by writing a dispute letter to the credit bureau that has processed the error or submitting a dispute request online if you used the Internet to obtain your credit report in the first place. Many consumers do not even know the answer to the popular question, “What is an excellent credit score?” However, they can be well on their way towards building a great rating by getting these errors corrected.
Build your credit in your business name
The best practice when it comes to business finance is to separate business finance from your personal finance. There is a number of benefits in doing so: Firstly, You can protect your corporate veil, which means you eliminate the possibilities to mix your personal and business funds. Secondly, you can start building credit for your business, which will obviously impact the availability of funds for your business, such as the ability to open a merchant account, obtain a business credit card, lease/buy a business vehicle, and so on.
Make Regular Payments on Balances
After the ball has started rolling in the right direction by deleting the errors and mistakes within your credit report, the next step that needs to be taken in order to improve your credit score over time would be to consistently pay down any accurate balances that are posted within your report. Make sure that you pay your bills on time, though, because late payments will cause all of your hard work to go out of the window.
Monitor your score on regular basis
Did you know that one in three businesses has seen a decline on the credit score in just 3 months time?
Knowing that fact, you need to make a plan to monitor your business credit score at least once every quarter to keep you updated with what’s going on with your score – and make the necessary changes.
Seek Assistance from a Professional Expert
One of the ways a business can do in order to improve their credit score is to get assistance from an expert in this field. He or she will be able to closely examine your financial past and provide you with the guidance that you need to improve your business’ financial health. Regardless of the condition of your business credit status right now, following the above steps will go a long way towards improving your business credit score.