How to Improve Your Small Business Credit Score
Your personal credit score enables you to buy a house, a vehicle, and many other things you want and need, and the same holds true for your business. A solid business credit score opens to the doors to opportunities that help you grow your entity, including financing for property and equipment, lower interest rates, and personal liability protection. Here are ways to improve your company’s credit rating.
Stay on Top of Your Credit Profile
Your credit profile is more than just your overall score. It is a full snapshot of your business, including owner information, debt-to-profit ratios, and outstanding debt. You may think it is fine, only to learn that your score is much lower than it should be when you’re rejected for a business loan. As with your personal credit profile, your business profile can have errors or omissions on it, so review it on a regular basis to ensure all information is accurate and pointing you toward higher credit scores. This includes corporate bank account information, loans, and loan payment histories.
Run Alongside the Big Guys
Have you failed to register your business with Dun & Bradstreet because you think it’s only for large corporations? Think again and register right away to help improve your business credit score. You should be registered with all of the major reporting agencies in order to build a credit profile that is worthy of the loans and lines of credit you deserve to build your entity. Make certain you are registered with the proper state and federal authorities, too, such as your Secretary of State. If you incorporated your company, make certain it’s registered properly and all information is up to date.
Stay Abreast of UCC Filings
Uniform Commercial Code, or UCC filings are the beginning of lien actions against your business property, and it’s critical you remain abreast of them at all times. As with incorrect loan payment information that lowers your credit score, a creditor that has filed a UCC against your property to begin a lien process negatively affects your credit rating. If the creditor has cause, try to resolve the issue as soon as possible. If the creditor doesn’t have cause, take the steps to remove the UCC filing and stop further action. You cannot afford this ding on your credit report.
Finally, improve your business credit score by ensuring the federal government assigned the proper SIC code for your business. This is your “industry code,” and lenders look at them as part of any approval process, so make sure your business is classified correctly. You shouldn’t be classified as an agricultural service if you work in retail, for example.