5 Credit Score Maintenance Tips for Business Owners

For entrepreneurs, maintaining a good credit score comes down to adopting the right habits. Here’s what you can do to improve the credit score of your business, or at least prevent it from going down.

1 - Bill payments

Paying bills late will have a direct impact on the credit score of your business. If you have enough cash flow, it’s wise to set out auto payments so your bills will always be paid on time. However, if paying the total bill on time is not an option, you can still preserve your credit score by making minimum payments on the bills. This is a good thing to keep in mind because preventing a credit score from falling is generally easier than trying to improve a low credit score.

2 - Credit utilization

The total amount of debt associated with your business also plays a role in its credit score. Banks understandably assume that a business that’s already using 80% of its available credit is a bigger risk than a business that is only using 30% of its total credit, which plays a big role in calculating your business’s credit score. The result is that the more debt you have, the harder it is to secure additional loans.

3 - Credit monitoring

Going over your business’s credit score reports from time to time can be very fruitful. Not only will this exercise help you spot what you could be doing differently to improve your credit score, but you may also be able to spot clerical errors made by the credit score company. Credit reports are put together by automated systems, and while mistakes on reports are not common, they do happen and can have a huge impact on the final credit score. Mistakes can be fixed by getting in touch with the credit report company.

You can further keep tabs on your company’s credit by using credit monitoring solutions. These are websites and apps that can be used to keep tabs on when your company’s credit is used, which will help you keep an eye on how your company’s credit line is being used. This is especially useful in helping you find out about cloned credit cards or fraudulent loans as soon as possible.

4 - Credit repair solutions

Credit repair companies specialize in helping businesses and individuals improve bad credit scores. But they can also help business owners improve a healthy score, or figure out causes for any strange credit score variations, so it’s worth getting on the phone with a specialist in this field if you’ve been having trouble. As this Sky Blue vs Lexington Law guide makes clear, credit repair companies offer a wide range of services at varying price ranges.

5 - Credit separation

Mixing your personal and your business finances can complicate how your credit score is calculated on both sides, so make sure to keep these separate. This will not only make it easier for you to monitor and manage your business credit score, but it can also make things easier for your accountant when tax season comes around.