3 Simple Ways to Build Your Business Credit Score

These days, a good credit score can mean the difference between a successful business and one that is doomed to fail. With the economic climate being the way it is many banks and lenders are very careful about what individuals they give finance to. Unfortunately, it is very easy for a business to find itself falling into the black hole of a bad business credit score, especially if it is new. But the good news is, it is equally as easy to climb back out.

Here are three simple ways to help you build your business credit score:

1. Check your business credit report regularly. You can obtain your business credit report from three different companies, Experian, Equifax and TransUnion, and it should be checked at least once a year. Your credit reports are the first things banks and lenders look at when it comes to making a decision about your loan application. Therefore it is important you keep them in good order.

2. Start Spending. Yes, you read that right! In order to establish your credit rating you will need to start borrowing and spending money on your business. You should do plenty of research before you begin borrowing any money from lenders. Try and go with the ones that report your borrowing habits to the credit reference agencies, because not every lender does this. Make sure you keep tabs on how much you are borrowing and what you are spending it on. Don’t go overboard with purchases, and only borrow what you need.

3. Pay back your lenders regularly and on time. Whilst it is OK to borrow money, and it does in fact help your credit score. It is also vital that you pay back the money you borrow within the terms of the supplier. Remember, if you regularly miss or are late with your payments this will be noted, and will have a negative effect on your credit rating.