As a small business owner, you are naturally concerned with hiring employees and growing your company, but one of your most important early tasks should also be building your business credit. You will need good credit when you look for investors or financing from lenders such as loans and lines of credit. Here is a simple plan that you can accomplish in six months that will help improve your business credit.
Find Out If Your Company Has a Credit Report
The main credit bureaus in the United States are Experian, Equifax, and Dun & Bradstreet. If you cannot find a credit report for your company with any of these bureaus, it means that your business has not yet established accounts that report to them.
Assess Your Company Credit Scores
Each of the main agencies has its own scoring system, so you need to remain informed about all of them. If your scores need improvement, you’ll have to work on bringing them up.
Obtain a Business Credit Card
Remember to always keep your personal and company finances completely apart from each other. This includes having a separate credit card for your business. Using a business credit card while always maintaining a good credit utilization ratio helps to build up company credit. Look for a card with low interest rates, rewards, and no annual fee.
Keep Up with Payments
Once you obtain a business credit card, avoid the temptation to only pay the minimum every month. The way to build good credit is to pay your credit card debt each month in full. If you find this difficult, work on reducing company expenses.
Use Vendors That Report to Credit Bureaus
Paying your vendors on time is another way to improve your company credit. However, this only works if your vendors report payments to credit bureaus. If your present vendors don’t do this, switch to vendors that do.
Correct Mistakes in Reports
You should periodically monitor your credit report to check for mistakes and discrepancies. If you find anything that is not as it should be, inform the credit bureaus so that these irregularities can be corrected.
For more advice on building business credit, contact our offices today.