Article Contributed by Kristen Gramigna
Businesspeople understand that a good credit score is a valuable asset, especially if you intend to get a business loan. A good credit score comes with many advantages, including strengthening your negotiation position, protecting your personal credit rating, limiting personal liability, conserving cash flow, limiting accumulation of personal debt, and maximizing financing opportunities. So improving your business credit score is well worth the effort.
How can you do this effectively?
Your personal credit history affects your business credit prospects only if you plan to use a personal loan to finance your business. In this case, you can get the capital you need only if you have a good credit history, and your personal credit score dictates not only how much money you’ll get, but also the interest rate, terms, and conditions of the loan. Thus, finding the most effective ways to improve your credit score is crucial. So, what should you do?
- Request Copies of Your Credit Report: Visit The Annual Credit Report (theannualcreditreport.com) which provides credit reports issued by the three main bureaus — TransUnion, Experian, and Equifax. Be certain you understand all the data, including the details regarding your payment history, current loans, and total amounts owed.
- Check for Inaccuracies: Your credit report may include incorrect or incomplete information. So check your credit report thoroughly and ask the credit bureau to fix incorrect or incomplete data. Don’t forget to ask for a copy of your new credit report after the error correction has been confirmed.
- Pay Bills on Time: Your credit score relates to paying your bills by the due date. If you’re unable to keep track of your bills, setting automatic payments from your bank account is a great idea. If you opt for this convenience, be sure you have enough money in your bank account to avoid overdraft fees.
- Understand How Credit Scores Are Determined: Credit scores are determined based on specific criteria, such as the number of unpaid bills, comparisons between the amount of debt and credit limit, whether you have a long or short credit history, if you’ve applied for a new loan, and how many and what type of credit accounts you have. To achieve a high credit score, the following factors are considered: If the amount you owe is much lower than your credit limit; if you’ve paid all of your bills; if your long credit history shows low balances and timely payments; if you haven’t applied for new accounts recently; and if you manage a mix of credit cards and installment loans without any issues.
- Use a Professional Service: If you’re unable to repair your credit on your own, find a credit counselor who can help you develop a plan to manage your finances and pay off your debt. However, be aware that some agencies charge excessive fees that will put you even deeper in debt.
About the author:
Kristen Gramigna is Chief Marketing Officer for BluePay, a merchant account provider that also offers payment gateway services. She brings more than 15 years of experience in the bankcard industry in direct sales, sales management, and marketing to the company and also serves on its Board of Directors.