6 Proven Strategies to Boost Your Business Credit Score

At Morris Accounting, we understand the importance of having a strong business credit score. A high business credit score not only improves your chances of getting approved for loans and credit lines but also helps you negotiate better terms and rates.

Here are 6 proven strategies to help you improve your business credit score:

1. Pay Bills on Time

Late payments can have a significant negative impact on your business credit score. That's why it's essential to pay all your bills on time, including loans, credit lines, and trade accounts. One missed payment can remain on your credit report for up to seven years, so make sure you prioritise paying bills on time.

2. Monitor Your Credit Report

Regularly monitoring your business credit report can help you detect and correct errors or fraudulent activity quickly. You can get a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) every year. Review your report thoroughly and report any inaccuracies or suspicious activity immediately.

3. Maintain Low Credit Utilisation

Credit utilisation refers to the amount of credit you're using compared to the amount of credit available to you. Keeping your credit utilisation low can positively impact your credit score. Aim to use no more than 30% of your available credit, and pay off your balances in full each month.

4. Build Strong Business Relationships

Building strong relationships with vendors, suppliers, and lenders can help you improve your business credit score. These relationships can result in favourable payment terms, higher credit limits, and better credit scores. Maintaining a positive payment history with your vendors and suppliers can also help you negotiate better terms and rates in the future.

5. Incorporate Your Business

Incorporating your business can help you establish credibility and separate your personal credit from your business credit. It also allows you to build a business credit history, which can help you qualify for loans and credit lines in the future.

6. Diversify Your Credit Mix

Having a diverse mix of credit accounts can improve your credit score. This can include trade accounts, credit cards, loans, and leases. However, it's important to only apply for credit when you need it, as too many inquiries can negatively impact your credit score.

Conclusion

Improving your business credit score takes time and effort, but it's worth it in the long run. By following these 6 strategies, you can increase your chances of getting approved for loans and credit lines, negotiate better terms and rates, and establish a strong business credit history.

Remember to prioritise paying bills on time, monitor your credit report regularly, maintain low credit utilisation, build strong business relationships, incorporate your business, and diversify your credit mix. By doing so, you'll be on your way to a better business credit score.