As restrictions ease in this post-pandemic era, many small businesses are seeking financing so they can reopen and better accommodate their customers. A crucial factor in obtaining the funding you need is a strong credit profile. Here are some strategies to help you boost your business credit score.

Pay Bills on Time

The first strategy is obvious: always pay your bills in a timely manner. This may be difficult when your cash flow is erratic, but payment history is one of the most important factors when agencies calculate your credit score. If you are unable to pay the entire amount you owe, making at least partial payments benefits your business credit score.

Ask Vendors to Share Payment History

Assuming that you are paying your suppliers and vendors on time, ask them to report your payments to the credit bureaus. Your history of prompt payments to those with which you work will help to boost your business credit rating.

Be Mindful of Your Credit Utilization Ratio

Your company’s credit utilization ratio is the percentage of your available credit that you are currently using. To improve your business credit score, it is important to keep this percentage at least 15 percent below your credit limit. You can accomplish this by increasing the amount of credit available to you and by paying down your balances.

Monitor Your Credit Report

You should monitor your business credit report on a periodic basis. Look for erroneous information or any indication of fraudulent activity. If you find any discrepancies, contact the appropriate credit bureau immediately so the mistakes can be corrected.

Don’t Neglect Your Personal Credit Rating

Even if you have taken the appropriate precautionary steps to keep your business and personal finances separate, be sure that you keep an eye on your personal credit history. Some lenders check your personal credit profile as well as your company’s credit score when you apply for funding.

For more advice on improving your business credit score, get in touch with First Class Lending.