Many people are under the impression that personal and business credit is the same. But they are not and this article is all about understanding business credit score, how to improve it and why should you go for business credit repair service.
What is a business credit score?
A business credit score is a numeric representation of your business’s creditworthiness. Using that score it is determined whether a company can be shortlisted for getting a loan or not. It is based on a number of factors:
- Payment history of your business.
- Company size.
- Risk factors of your business.
- Tax payments.
- Credit obligations.
These are the common factors affecting the business credit score but, it can vary with different industries and their algorithms.
Why improving a business credit score is important?
The most important reason for having a good credit score is that it can give you the advantage of availing more money from lenders and negotiating on interest rates. Business loan lenders consider a business credit score before approving any type of loan.
How to improve your business credit score?
Following are the ways to improve:
- Pay all the bills and taxes on time- Not paying bills on time will affect your business credit score badly. You should always clear all the bills, invoices, taxes before the due date. It will not only improve the credit score but also incorporates a good business habit i.e being disciplined.
- Keep a low debt level- Borrowing a large amount of money from banks or online lenders at the same time will also affect your score. It is advisable to keep the debt level as low as possible by borrowing money only what is required at that time.
- Use your credit wisely- Use your credit wisely, play by the rules and ensure to clear the dues on time.
- Increase the credit limit and decrease credit card spending- Yes, this process of increasing your card limit but limiting the spending can improve your score as well.
- Business credit repair service- There are many trusted service providers who can help you to improve your credit score. Pineapple Funding is an online loan broker who can also provide business credit repair services. Contact us to find out more.