Three Ways to Fix a Bad Credit Score for Your Business
A bad credit score is not good for any business. Not only is it difficult to get a loan from a lender, but it may become a challenge to conduct business with vendors or suppliers and more importantly grow your business to its full potential.
If your business is marked with a bad credit report, there can be light at end of the tunnel as there are steps to get into a more favorable financial position.
Here are three ways to effectively improve your business’s bad credit score.
- Communicate with Your Lender and Creditor(s)
According to CreditAbsolute.com, reaching out to your lender or creditor(s) to adjust payment options is a vital first step. This may or may not always be possible, yet lenders and creditors would rather restructure payments than receive little or nothing (in the event your business fails altogether). You may also want ask them to report all account closures and repayments to credit rating agencies. While this may already be in practice, it’s important that your payments and actions are being reported to help your bad credit score.
- Be Extra Diligent with Your Business’ Monthly Payments
There are many causes for having bad credit and not paying bills (including bank loans and credit cards) on the balance due date or not at all is perhaps at the top of the list. According to Balance Small Business, paying your business’ bills on or before the due date is not only good business practice, but will improve your bad credit score overtime. It will also help maintain a positive relationship with your creditors, suppliers, and lenders.
- Always Review Your Business Credit Report
This is perhaps one of the easier steps to improve your bad credit score. According to forbes.com, inaccuracies on credit reports do happen and they just might be the cause of lower than necessary bad credit report.
For instance, always make sure all the information is correct and that the report is current. While there are many aspects to consider, always remember to make sure:
- Accounts on the report are related to your business. If they are not, have them clarified and removed.
- Bankruptcies more than 10 years or the associated accounts are not reflected on the report.
- Other negative information more than seven years should not be on the report.
Working towards improving your bad credit score takes time and perseverance. While it’s important to be patient and utilize more sound business practices, your efforts will pay off in the long term with the opportunity for business growth and more profitability.