Whether you're a new startup or have been operating for decades, now's the time to increase your business credit score. Not only can it help you acquire critical financing, but it can also increase the value of your company and even protect your personal credit.
Efforts like preventing non-payments, debt collection agency research, and regular credit monitoring can go a long way to protecting your bottom line. Keep reading to learn a few easy ways you can clean up your business credit score.
Debt Solutions for Businesses
If you offer products or services in advance of receiving full payment, preventing non-payments should be high on your list of priorities. The problem is, many companies don't have immediate access to the debt collection solutions that agencies like Debt Recovery Resources have to offer. Debt-RR helps you claim what's yours.
It's estimated that around five percent of the U.S. GDP equates to around the number of unpaid invoices due to small businesses across the country. An investment in a debt collection agency like Debt-RR can prove to be one that improves your bottom line and your credit score at the end of the day.
Use Auto Bill Pay
Let's face it. We're all subject to human error. With busy schedules, calendars jam-packed with meetings, and unexpected tasks awaiting busy business owners around every corner, things can fall through the cracks. The great news is that, with auto bill pay, you don't have to worry about due dates.
One of the biggest impacts on your business credit score is your consistent ability to pay your bills on time. When you have the money in the bank, there's no reason to take an unnecessary hit on your credit score just because a bill slipped your mind. After all, a busy business owner is one who's likely making progress in other areas. Why not ensure your finances are one of them when it's so easy to do in our current day and age?
You only have to set up your recurring payment preferences once, and your bills will pay themselves on time, every time.
Work on Your Credit Utilization Ratio
Aside from paying your bills on time, another big aspect the credit bureaus consider is your credit utilization ratio. This is the amount of credit currently used compared with the credit you have available. It assesses your ability to control spending, thus reflecting your ability to keep risky financial behaviors at bay. Ideally, you want to keep your debt-to-credit ratio at or under 15%.
Even if you fall far outside this spectrum, there are several ways you can start working now to lower your credit utilization ratio:
- Seek debt solutions for companies to apply money owed to your outstanding debt.
- Call creditors to request an increase in credit limits (and don't spend it).
- Open a new line of credit.
- Create a plan to accelerate the process of paying off existing debts.
- Don't settle with paying only the minimum monthly payments.
- Pay your bills more than once monthly.
See If Suppliers Will Establish Credit Accounts
You rely on your suppliers to produce your products or services. This is a regular expense of doing business. In addition to paying them with a credit card, which is tracked by the credit bureaus, your efforts to keep these accounts in good standing can have a dual effect on your credit history when you establish a credit account with these suppliers.
Here's how it works. When you pay off your credit account with your supplier, they report to the credit agencies that you've made good on your promise to reimburse. The payment is made on your credit card, which you then pay off at the end of the month. Your credit card company proceeds to report to the same credit agencies that you've followed through. The same bill gets reported positively twice!
Don't Count on Accuracy with the Credit Bureaus
For the most part, the three major credit reporting agencies do a good job keeping an accurate record of your credit history. However, around one in five American consumers have an error on their credit report. Your business is no different.
We all make mistakes. Just a few that could be lingering on your business credit report include:
- Incorrect data entry
- Someone else's information on your report
- Duplicate accounts
- Out-of-date information
It's not the responsibility of the credit bureau to check for these inaccuracies and take the necessary action to ensure they're corrected. You have to look out for your own best interest.
It's Never Too Late to Increase A Business Credit Score
It's never too late to work on cleaning up your business credit score. Debt Recovery Resources is here to help. We can work to offer debt collection solutions best suited for your industry.
Knowledge is power. By putting these suggestions to use, you can gain the competitive edge only a great business credit score can provide.