As a business owner, your company’s credit score matters. It’s this score that will help determine whether you can get small-business loans, or whether you can get them at a good interest rate. It can even influence potential customers, contractors, and suppliers as they make decisions about doing business with you. So keeping a good credit rating should be a top priority in how you conduct business.
Not sure how to do it? Here are a few tips:
Even if you’re a sole owner, incorporating your business and making it a legal LLC, S Corp, or C Corp gives you added legitimacy. It also helps keep your business credit rating separate from your personal rating — so that any negative marks in your personal history won’t influence the score for your business.
- Pay on time, every time.
When you need to outsource products and services, make sure you’re paying your bills on time so that no costs go delinquent.
- Set up business-only banking and credit card accounts.
Handle your finances through these accounts, rather than using your personal funds.
- Set up a credit line.
Work with your suppliers to set up a credit line that you can use to receive products and services before you pay. Then make regular payments to keep everything up to date. Be sure to ask your suppliers to report your good payment history, too, so the credit bureaus know how you’re handling expenses.
- Keep corporate information current.
Check with the credit bureaus — Experian, TransUnion, and Equifax — on a regular basis to make sure your business information is correct. You’ll also want to get a DUNS number through Dun & Bradstreet, so they can maintain a credit file for you.
As you build and maintain a long-term, sound credit history, you’ll find new ways to help your business continue to thrive. And your business will become trusted with creditors, business partners, and others.
Need help getting on the right track?
Find a business Advisor today to learn how Horizon Bank can help with the financial needs of your business.