Negosentro | How To Maintain An Optimum Business Credit | You’re probably already aware that you personally have a credit score, but your business will also have a credit rating that can fluctuate and determine whether or not you receive any funding you apply for. Unlike payday loans where your personal bad credit may be considered, if you have bad business credit, you’re less likely to be approved for any loans you apply for. To ensure your business can go from strength to strength, here are the best ways to maintain an optimum business credit.
Use A Business Credit Card
Just like your personal credit rating, using a credit card for your business will help increase it’s score. The higher the credit score you have, the more likely your business loan application is to be approved. By using a credit card to pay for your business spending and then paying it all off each month, you’ll keep your score where you want it to be. Even if you completely pay off a credit card, it’s wise to keep the account open. This way if you notice a dip in your score from other factors, you’ll still have the credit card to fall back and be able to increase your rating.
Keep Up With Any Payments
If you decide to use a business credit card, you need to guarantee you make all payments when required. Similarly, you want to pay all other bills on time as well. It’s best to set up a standing order or a monthly reminder so you can be certain it’s been paid. A standing order will leave the business account automatically when needed and you’ll just need to make sure the funds are available. Any missed payments could have a detrimental affect on your credit score so it’s a good idea to organise your outgoings carefully.
Use Separate Accounts
If you’re business is just starting out, don’t be tempted to use your personal bank account for your finances. Any business credit you could have been building up, will instead go onto your own score. Then when it comes to applying for funding, it’s unclear to the lenders which money relates to what.
Keep Track
To make sure your business score is maintaining an optimal level, you need to be aware of what it is and how it’s changing. If you check your score once a year, you may be surprised to see how much it’s decreased by the next time. To check it, you’ll most likely need to use a paid service who will then provide it to you. Although there is a cost involved, knowing your business credit score and how to improve it, will help you secure success in the long run.
Your business credit score is one of the most important factors when trying to grow and expand. Don’t just trust that because you pay everything on time that your score is high. Regularly check it and be aware of anything that could lower it. Treat your business credit as an extension of your own rating, and you’ll soon be able to maintain an optimum credit score.
