Are you worried that your poor personal credit will affect your business credit? If you want to start a small venture, you have to do something to improve your personal credit score. The effect may not be immediate if you have capital, but as time goes on, you will need business credit cards, loans to expand the business, or emergency financial help. The good news is that there are numerous proven ways that you can still build your business credit while your personal credit remain low. Follow this article to learn more:
Have a Registered Business
You cannot build the credit score of a business that is not registered. In fact, the credit bureau will not recognize it as a business and therefore there will be nothing to keep records for. Lenders, on the other hand, will have nothing to do with such a business. As a precaution, they ask for a certificate of incorporation before they will consider any business for credit.
Paying Business Bills on Time
In fact, it is better to pay business bills earlier than on the date. If the business is not defaulting or remitting these payments late, the credit score will grow even if the owner’s personal credit score is not all that good. Though some business people think that this is not important, it has a strong impact on credit history since the credit bureau can now access it. It is crucial to know that we are living in an era where data science helps institutions access information with ease.
Open Trade Lines
Trade financing between the business and a lender is an excellent way to manage business credit. These accounts focus on giving the company a credit opportunity where they can pay between 15 to 30 days later. In most cases, trade lines are between business and suppliers of different goods or services. The business owner can also encourage these lenders to submit the positive business history to the bureau to keep promoting the credit history.
Resolve Errors on Your Business Credit Report
According to business credit consultants at Boostcredit101, one has to resolve any errors on a business credit report as quickly as possible. That is why it is critical to keep monitoring credit reports and check on them more often. It may not be possible to check every other day since it is costly, but checking every few months can help. Most credit bureaus have customer support and resolution centers to deal with such issues. It is the right of a business owner to query any discrepancies and get answers or clarifications.
Build Your Personal Credit
The last proven way to improve business credit is to start building yours. System data can link you to the business and any efforts to clear your name will reflect on the business. The secret is working on all of the mistakes that promoted poor credit in the first place. Also, some other tips as advised by experts can be applied.
By the time all of these things are put in place, your business, whether is it new or old, will have better credit scores than before. Building it is an ongoing effort and one cannot afford to ignore it.
