The Importance of Good Business Credit
As a business owner you are probably now aware of how important it can be to have a good business credit score. Having a low business credit score will impact whether lenders will work with you and can determine whether companies will do business with you.
If you do find a lender, the high interest rates and fees will greatly inhibit your business from being successful. Having a bad business credit score can be a slippery slope, as interest rates increase, making it more difficult to pay off debt while also making it difficult to grow the business without the necessary resources. Therefore, it’s very important to know how to repair business credit and build your busineess credit, if your score it low.
How To Repair Business Credit
Here are the primary steps you should take in order to repair your business credit and get back on track with growing your business into a successful company:
- Contact your lenders and attempt to negotiate an alteration in your repayment options. If you’re having financial problems, many lenders would rather restructure your payments, than receive little or nothing if your business were to go bankrupt.
- It’s important that you focus on also repairing your business’ finances while working on repairing your credit. Put as much of your profit into paying off debt as you can.
- Contact your lenders and request that they report all account closures and repayments to the credit rating agencies. Although they may already do this, lenders are not required to, therefore it is always a good idea to check with them to ensure that these positive actions are being reported to help repair your business credit.
- As a Hail Mary you may consider a debt consolidation program. It’s a long term fix, which will make it easier to pay off debt and get back on track, but will take quite a long time. This option is better than filing bankruptcy, but again, it should be a last resort.[/custom_list]
Keep in mind that once you have successfully paid off your outstanding debt, or have gotten back in good standing with your lenders, it’s important to keep a close eye on your credit use. Once you’ve repaired your business credit, you don’t want to ruin it again by over-accumulating debt again.
Using your business credit is a good thing but make sure you use it conservatively. Just like consumer credit, with business credit you should keep a low debt-to-credit-limit ratio. In other words, whatever your business credit limit is, you should keep your balance at 50% or less.
Removing Negative Business Credit Reportings
In many cases, repairing your business credit can be as simple as identifying negative items on your business credit report which were incorrectly filed, or are altogether false. Requesting to have these false, negative items from your business credit report can help to repair your business credit significantly.
If you’re a business owner struggling with bad credit and need assistance repairing your business credit, contact Credit Absolute for proven assistance with business credit repair. There’s no reason your business should suffer due to false or incorrect credit reporting.