Advice for Small Business Owners - Tracking and Enhancing Your Business Credit
For small business owners, there is a certain peace of mind in knowing that if needed a business loan could be obtained for the company. Having good business credit is one of the main factors in being able to get a business loan. As with personal credit, companies need to carefully maintain their accounts in order to keep up a good credit score.
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Pulling Credit Reports
For small businesses, it is imperative to regularly access credit reports for review. With personal credit, doing this can affect scores. However, with businesses this is not the case. Pulling your business credit report often does not have any impact on your rating. There is actually monitor system that you can use which pull your reports or score in order for you every so often. You can also go from side to side agencies like Experian to regularly get your information.
Checking Your Reports
When you pull these records it is important to carefully review them. You should note changes and look for errors. When reviewing the documents for errors, you should be checking things like the balance information and listed accounts to see if everything is correct.
Used To Available Credit Ratio
When trying to build your business credit, you will need to get a few business cards and pay them on time every month. In addition to doing this, it is highly important to also keep your used to available credit at a low ratio. In other words, you don't want to use up your entire credit line. It is actually best to only use 20 to 30 percent of the available money on each card. Doing this will help boost your credit rating.
Pay Bills On Time
This you will hear over and over: pay your bills on time! This is the simplest way to build your credit score, whether it is for personal or business purposes. When reviewing your credit reports you should also be verifying that your payment history is showing up on the reports. You want to make sure that all bills that you are paying on time--anything that will reflect positively on your financial habits--show up on the reports. If there are companies that are not showing up, make sure that you call them and ask if they report payment history to the credit bureaus. If they do not, ask them if they can do so for your account, and if they say no it is best to do business with another company that will.
Phoenix small business funding experts point out that even if you have bad personal credit, having good business credit can help you get a business loan with little problem. This is also why establishing good business credit is so important, according to Arizona business financing officials.