Tips You Can Follow to Improve Your Business Credit Profile
October 20th at 7:09pm Published by firstdownadmin
Your business credit profile is an important part of your business, and is one of the most important things that lenders take into perspective before handing you over business funding. If you a poor credit score, you will never be able to get the kind of funding you are looking for. While banks will outright reject you, private lenders will also give you a higher cost of capital or interest on your business funding.
If you have issues getting small business funding due to your credit history, then you have to take steps geared towards improving it for the better. Your credit score is an important part of your small business startup and you should look to perfect it at all times.
Here we mention some important tips that you can follow to improve your business credit profile, so that there are no shortcomings as such found within it.
The first thing you need to do for improving your credit score is to improve the repayments you are making on a current funding. If you are not making the payments on time, your credit score would suffer and fall further down. If you want a perfect credit score for your credit report, then you need to take adequate measures geared towards improving your repayments. By improving your repayments we mean that you should make sure that there are no shortcomings as such in the entire process.
If you have to make a repayment at the start of the month, you should make sure that it is made in time. Additionally, you should also try to follow the payment plan with your landlord, and should pay the rent within time. Most properties are registered with your credit reporting agency, which is why your credit history will surely be affected by how you pay your rent.
Increase Credit Limits
Your credit utilization ratio has the second biggest impact on the final credit score that you have. For those who are new to this concept, the credit utilization ratio is the ratio meant to determine just how much credit you are using from your actual limit. The credit utilization ratio should be no more than 35 or 40 percent. This means that if you have a credit limit of $10,000, you shouldn’t use more than $4,000 at a given time.
By following the concepts of the credit utilization ratio, you can surely improve your business dealings for the better.
Your credit rating will take a major boost if you improve this ratio.
In short, the recipe to improving your credit score is to make sure that you are making payments in time and have a decent credit utilization rate.