So, what factors affect your business credit score? And how can you make sure you’re doing everything you can to maintain a healthy score? Here are five things to watch out for:
Payment History: If you’re like most business owners, you’re probably more focused on making money than paying bills on time. But if you want to keep your business credit score in good standing, you need to make sure you’re paying your bills on time, every time.
Blanket UCC Filings: Did you know that some lenders can file a blanket UCC filing that gives them an interest in ALL your assets? This can seriously reduce your ability to get credit elsewhere. To avoid this, plan your credit carefully and negotiate UCC filings according to your needs.
Debt: The more debt you have, the harder it will be to get new credit. Try to pay down your debt as much as possible before applying for new loans or lines of credit.
Outdated Financials: Make sure your financials are up to date on your credit reports. If they’re not, it could negatively affect your company when the lender compares available data. Keep your financials updated and plan to update often.
Legal Structure: If you’re not incorporated, you should be. Lenders are less likely to loan money to sole proprietorships and partnerships. They prefer corporations and limited liability companies. Make sure you’re using the right legal structure for your business.
So, there you have it: five things that could ruin your business credit (and how to avoid them like the plague). Keep these factors in mind as you navigate the world of business financing, and you’ll be well on your way to building a successful and financially stable business.
If you want to learn more about building and maintaining a healthy business credit score, or if you need help getting your business credit established, we’re here to help. Join our email list for tips and advice, or book a free consultation to speak with one of our experts. Let’s work together to help your business thrive!
