Before your business can qualify for valuable small business loans, you’ve got to be able to prove your creditworthiness to lenders. Most often that requires building up your business credit score. The following are four of the best ways to strengthen your credit profile in order to get your firm the funding it needs.
Credit Tip #1 Start Today
Having no business credit history can sometimes be as bad as having blemished credit. In order to establish a business credit profile, you will need to register with the credit reporting agency Dunn & Bradstreet. Then open a business credit card account and start making small, regular purchases. As you pay these off on time you will begin to build a credit that will show lenders you can handle debt responsibly.
Credit Tip #2 Limit Your Credit Applications
While it is important to have a history of credit transactions, it is also important not to apply for too many credit accounts at once. Credit rating agencies will see this as a sign of desperation for money and will ding your score accordingly. It is better to apply to just one lender at a time and use that line of credit with timely payments for an extended period before asking for credit from other lenders.
Credit Tip #3 Ask Your Suppliers for Help
Your suppliers can be an invaluable resource for you in building your business credit. When you make an on-time payment to your suppliers, ask them to report that to the credit agencies. Each entry of a timely payment will improve your chances of getting the business loan you desire.
Credit Tip #4 Pay On Time
Of course, nothing can build business credit better or faster than making all your payments on time. That is the single most important part of creating a good credit profile and is really the main thing that lenders want to see.
With some concerted effort, you can start building your business credit so that lenders will someday be excited to loan you money.