It is important for small business owners with their eyes on growth to build their business credit scores. Good business credit scores can facilitate lease approval, improve terms from venders, reduce your insurance premiums, and help you obtain business lines of credit or business loans for lower interest rates. Here are some tips on how to boost your business credit score.
Put a priority on separating your business and personal finances. This protects your personal assets if your business acquires debt. Procure a bank account, credit card, and phone line in the name of your business. Other advisable steps include getting a nine-digit DUNS number from Dun and Bradstreet, obtaining a federal employer identification number, or EIN, and incorporating or forming a limited liability company, or LLC. Credit bureaus use your DUNS and EIN numbers to identify your payments and other financial activities when compiling your business credit score.
Manage Cash Flow
Once your business acquires a separate credit card, you can use it to help manage your cash flow. The favorable terms you receive from vendors, insurance companies, and financial institutions as you make on-time payments further contribute to the healthy cash flow of your business.
Be Sure Vendors Report Payments
One means that credit bureaus have of assessing your business credit score is the reports that vendors make concerning the timeliness of your payments. Be sure to work only with vendors that report to credit bureaus. To obtain an optimum score, pay these vendors not only on time but early.
Track Your Credit Rating
Be sure to regularly obtain copies of your business credit reports from the main credit bureaus. Monitor these reports carefully for mistakes or evidence of spurious financial activities. If you detect errors, inform the credit bureaus immediately so that they can correct your reports.
For more advice on improving your business credit score, get in touch with Bear River Financial.