How to Repair Your Business Credit Score
If you own a small company, your credit score can have a large impact on your business. A history of bad credit will make it more difficult for you to qualify for loans and can result in higher interest rates for any that you are able to acquire. Rebuilding your score can have many benefits, so it is important to make this a priority. The following are some things that you can do.
1. Don’t Create New Debt
If you are already in debt, it will not help you to dig yourself deeper. Avoid opening new lines of credit or applying for additional credit cards during this time. Don’t make any large purchases that would require the use of a loan.
2. Make Payments On Time
Perhaps one of the best ways to begin rebuilding your credit is simply to make all of your payments on time. If you have several payments to make each month and have trouble remembering when they are all due, it may help to set up reminders. This method takes time, but it is an important step.
3. Examine Your Credit Report
Sometimes your bad credit may not be entirely your fault. Errors in your credit report could result in a lower credit score even if you are doing everything right. To prevent this from happening, you should make sure to look over your report at least once a year to ensure that everything is accurate.
4. Renegotiate Your Terms
If you are having trouble making your payments, it might be a good idea to talk to your bank or lender about lowering your monthly payments or interest rates. Many people may think that these are absolute, but lenders are sometimes willing to work with you to make repayment easier. This can help rebuild your score by reducing the likelihood that you will miss more payments in the future.
5. Keep Using Your Lines of Credit
When you have bad credit, you might think it’s better to stop using it altogether, but this is not necessarily true. Continuing to use your lines of credit while making payments on time, or early, can help improve your score more quickly.
Because the state of your credit score can have a significant impact on your small business, you should make sure to do what you can to keep it from falling too low. However, a low score does not necessarily mean the end of your business. Use these tips to rebuild your score and eventually you will be able to more easily achieve funding with lower interest rates and better terms.