It can be difficult to find that your company is struggling financially and can’t get a loan due to a low credit score. Building business credit is a vital part of running a company, and that score is going to affect everything from loan interest rates to what types of credit lines you can open. Luckily, most small business owners can greatly improve their credit scores in a matter of months with a few simple tips and tricks. Here are four simple ways to quickly boost your small business’s credit score.
Establish Credit Accounts with Your Suppliers
One of the best ways to quickly boost your business credit score is to establish new credit lines with your suppliers. After you have built a relationship with a supplier for a short period of time, they might allow you to create a formal credit line. If that credit line is reported to the primary credit bureaus, it should increase your credit score almost immediately. By establishing credit accounts, you can boost your score and improve your supplier-company relationship.
Increase Your Credit Limit
If you have been in business for a few years, then you might be able to increase your credit limits. Credit card companies love to extend a client’s credit limit as long as they make their payments on time and regularly use their cards. For those who haven’t been in business very long, many credit card companies have introductory cards with lower limits. Using and paying off those cards will boost your business credit score by a substantial amount. Keep trying to increase your limits, but make sure you stick to your budget and avoid over-borrowing and over-spending.
Dispute All Errors
A minor financial error doesn’t always seem like a major problem, but those blemishes could be dropping your business credit score by dozens of points. At least once every month or two, you should take a fresh look at your company’s credit report to see if there are any errors or inaccuracies. Challenging those issues can take some time, but your score should jump up as soon as they are wiped off the report. Take the time to dispute all errors to avoid incremental losses to your credit score. Small things add up and can threaten your business’s ability to get approved for loans and higher credit limits.
Add Existing Tradelines
Credit tradelines are the records that credit reporting companies use to determine credit scores. To increase your credit score, a credit building company can add you as an authorized partner on existing tradelines. Those high-quality tradelines have usually been in good standing for multiple years, and they might bring your credit score up by dozens of points. This is a legally recognized and legitimate strategy businesses use to up their credit score, and it could help you boost yours. You can easily have a credit building company drop you from their tradeline later, which will simply make you lose the credit points that came by way of its association.
Once your business credit score has hit a good level, you must continue to keep an eye on it. Issues such as transaction errors and delinquent accounts will drive your credit score into the ground, and those problems must be taken care of right away if you want to avoid major financial roadblocks in the coming years. Follow these tips to boost your small business’s credit score and maintain your financial capabilities and options.