Strategies To Improve Business Credit Scores
The current credit landscape is complex and many businesses struggle to traverse the increasingly difficult terrain. An improved business credit score can make planning for future growth, equipment or building investments, a national product launch, a business loan, or simply negotiating vendor payment terms easier. Businesses can employ strategies to improve their score and may seek the help of outside services.
Strategies that may help improve a company’s creditworthiness include tackling account delinquencies. Obtain a copy of the business credit score before contacting a credit repair service and identifying any delinquencies. Make sure to pay on-time and after six to nine payments in a row, et ahold of the creditors or lenders and ask them to delete the negative reports.
Consider changing the way outstanding debt is organized. Give the lenders or creditors a call and ask them to reorganize the payment terms. This can be helpful for businesses that are low on cash because most debtors would rather get a revised payment than risk losing all of it if the business goes bankrupt.
Nurture the business relations with vendors and strive to always pay them on time. It can be helpful to ask for letters from those vendors that outlines those timely payments and any other responsible business behavior. Sending these letters to the credit reporting agencies may make a difference in the credit report.
It is a good idea not to use any more than 30% of the total business credit. What this means is if the business has a $20,000 line of credit, strive to keep the utilization under $6,000 at any time. The higher percentage of credit that is used may negatively impact the score.
When the business is able to make a large payment on a line of credit, it can be helpful to make sure the credit reporting agencies know. Contact the agencies and make sure they know about the paydown to help neutralize negative reports on the credit profile.
Some businesses choose to work with credit repair services because there are numerous inaccuracies on their report, and the wish to have them resolved. Typically a repair company will ask for copies of the business credit report. The reports are analyzed with software specific for credit reports, and a list of items that could be disputed is created. With agreement from the business owner, the service will dispute the items.
Repairing business credit scores can be time-consuming depending on how complex the profile is. Companies with only a few disputed items may see resolution in a few months while those with a long history of delinquent payments and other items may take closer to six months.