Were you aware that improving business credit will let you get more favorable loan terms?
Improving credit is something that many people struggle with, including businesses. When your credit score decreases, you’ll have a hard time borrowing money because lenders will deny you or charge high interest rates.
Fortunately, you can do several things to get a high credit score and we’ll outline what they are. In no time, you can start improving credit without any problems.
Here are 4 tips on improving business credit for startups!
1. Stop Borrowing
When it comes to improving business credit, the first thing you must do is stop borrowing as soon as possible. Both business and personal credit are affected by how often you borrow money, so reducing this will help you see major increases in your business credit score.
If your business is currently relying on loans to get by, figure out how you can reduce expenses elsewhere. Unless you stop borrowing, you’ll have a hard time getting out of the cycle that lowered your credit.
2. Prioritize High-Interest Loans
After you stop borrowing money, the next thing you must do is prioritize loans with the highest interest rates. When you have multiple loans, paying off the one with the highest interest will help you save more money over time.
When paying off this loan, ensure that you’re making minimum payments on everything else. This will further build your credit and prevent you from paying late fees.
3. Use a Card for Building Credit
While you shouldn’t rely on borrowing, getting a high credit score can also be done by using a credit-building card. After applying for business credit cards, you can use them to make smaller purchases that’ll help you build a positive history.
Cards for building credit often come with low credit lines, preventing you from spending a lot. However, you may also get a secure business credit card that lets you set your line of credit by depositing money.
4. Hire a Credit Repair Service
The last thing you can do to improve credit is to use a credit repair service. Many people resort to credit repair services when they feel that something isn’t right about their credit report.
For example, if your credit report states that you’ve missed payments, you can file a dispute to correct that. A credit repair service will gather necessary information and communicate with the credit bureau on your behalf.
Start Improving Business Credit Now
As you can see, improving business credit doesn’t take much. You’ll just need to pay things on time and stop relying on loans to fund your business.
When you’re ready to start improving business credit, we encourage you to reflect on your current financial status. Cut costs wherever possible and figure out how you can get more money to pay debts so you can get more favorable loans in the future.
Browse our other articles to learn more about business and personal credit.
