Maintaining a healthy credit score is just as important to your business credit as it is to your personal credit. If you notice your business credit score fluctuating, this can be perfectly normal. To understand why it can change is important and helps maintain healthy credit. Good credit is important for your business to remain successful and, when needed, get approved for loans in the event you need cash to expand your operation.
Your company’s credit report shows lenders, suppliers, banks, vendors and other businesses how your company handles its finances. When applying for credit, lenders need to see your business can repay on a loan, line of credit, etc.
Some factors that can impact your score are:
• Reporting by vendors. Keeping a good payment history with your suppliers and vendors will increase your business credit score. You can even ask them to report to credit agencies of your on-time payments. On the other hand, delayed, late and untimely payments can negatively affect your score.
• Balances. Carrying balances on your business credit card can also affect your score, unfavorably. Pay them down as much as possible. Even by just reducing a balance will immediately create a positive impact on your score. If you already have several business credit cards, transferring balances to other cards will lower your overall debt-to-equity ratio and improve your score.
• Keeping unused accounts open. If you have unused cards that do not show a balance, keep them open! Closing these unused accounts reduces the amount of available credit which can affect your score.
Staying on top of your credit by ordering credit reports a couple of times a year and monitoring credit activity will ensure there isn’t any false information that can negatively affect your score.
If you find your business in need of debt relief or want to know alternatives to bankruptcy, contact American Finasco. Our team is dedicated to helping our clients with debt solutions. Visit us online at American Finasco and fill out our online form for a free consultation. Contact us today, we look forward to hearing from you.