Here are five steps that small business owners can take to improve their business credit:
Establish credit accounts: The first step to building credit is to establish credit accounts in the name of your business. This can include getting a business credit card, opening a business line of credit, or applying for a small business loan. Make sure that you make all payments on time and in full.
Monitor your credit reports: Keep a close eye on your credit reports to ensure that there are no errors or fraudulent activities that could negatively affect your credit score. You can get a free credit report once a year from each of the three major credit bureaus (Equifax, Experian, and TransUnion).
Pay bills on time: This is one of the most important factors in building good credit. Late payments can have a significant negative impact on your credit score. Make sure that you pay all bills on time, including utility bills, rent, and other expenses.
Keep your credit utilization low: Your credit utilization ratio is the amount of credit you are using compared to the amount of credit you have available. Keeping this ratio low can help improve your credit score. Try to keep your credit utilization below 30%.
Build relationships with lenders: Building relationships with lenders can help you secure better terms and rates on loans and credit lines. Make sure that you communicate regularly with your lenders and keep them updated on your business’s progress.