The Benefits of Following a Business Credit Building Program

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The Benefits of Following a Business Credit Building Program

Published By Janet Gershen-Siegel at May 31, 2018

Building your business credit - Credit Suite business credit building program>

A Business Credit Building Program May Be Right For You

Written by Janet Gershen-Siegel

Do you know the benefits of following a business credit building program? Following a business credit program means that your company acquires chances you never felt that you would. You can get new equipment, bid on real property, and cover the company payroll, even when times are a bit lean. This is specifically helpful in seasonal business enterprises, where you can go for calendar months with merely low sales.

Given this, you should focus on developing your business credit. Enhance and maintain your scores and you will have these chances. Do not, and either you do not get these business opportunities, or they will cost you a lot more. And no business owner wants that. You have to know what affects your company credit before you can make it better. A business credit building program can truly help.

Credit History Length Matters

This is generally the length of time your company has been using business credit. Naturally newer companies will have very short credit histories. While there is not so much you can particularly do about that, do not fret. Credit reporting agencies will also consider your personal credit score and your own background of payments. If your consumer credit is good, and especially if you have a fairly extensive credit history (that is, you did not just get your very first credit card a short while ago), then your personal credit can come to the rescue of your corporate.

Normally the reverse is also true. Hence if your private credit history is poor, then it will impact your corporate credit scores. This will happen until your company and consumer credit are separate.

Do Not Let Your Credit Utilization Rate Hurt Your Small business

Your credit utilization rate just shows the amount of money you have on credit. It is then divided by your total available credit. Lenders ordinarily do not wish to see this go above 30%. So for each $100 in credit, do not borrow on in excess of $30 of that. If this percentage is increasing, spend down and work off your financial debts before borrowing more.

Your Payment History is Important

Late repayments will affect your company credit score for a good seven years. If you pay your small business (and personal) financial obligations off, as fast and completely as possible, then you can make a very real difference in your credit scores. Make sure to pay promptly and you will reap the benefits of punctuality.

Your Personal Credit can Affect Your Corporate Credit

Are you having a dissatisfactory business year? Then it could wind up on your consumer credit score. And in case your firm has not been in existence for too long, it will directly have an effect on your company credit. Having said that, you can unlink the two by taking steps to uncouple them.

Such as, if you get credit cards only for your company, or you open up business checking accounts and various other bank accounts (and even get a business loan), then the credit reporting agencies will begin to treat your individual and small business credit independently. Also, make certain to incorporate, or at the very least file a DBA (doing business as) status. You can also take care of your company’s expenses with your business credit card or checking account, and ensure it is the business’s name on the bill and not yours.

The Credit Reporting Bureaus Can Just Plain Get it Wrong

Just the same as every entity out there, credit reporting bureaus just like Equifax and Experian are only as good as their data. If a business’s name is similar to another’s, or your name is a lot like another small business owner’s, there could be some errors. So keep track of those reports, and your company report at Dun & Bradstreet, PAYDEX.

So stay on top of these reports and challenge charges with paperwork and transparent communications. Do not just allow them to stay incorrect! You can repair this! And while you’re at, it you should also be monitoring the credit reporting bureau which only handles consumer credit, TransUnion. If you do not know exactly how to pull a credit report, do not fret. It’s easy.

Once you learn what has an effect on your corporate credit score, you are that much closer to building better corporate credit. Using business credit building programs can help. Learn more here and get started toward building business credit.

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