Building and retaining a strong business credit profile can be an invaluable tool for small businesses but particularly for those companies that rely on borrowed capital to promote growth and other enterprise initiatives. Luckily, it is quite easy to handle your profile.
If your loan application is not approved as a strong business credit profile, you will have more options than another business having a poor profile.
Here are five things to improve your profile that you shouldn’t ignore.
Review your profile regularly: Fortunately, the business credit offices make it relatively easy to view your profile, so there’s no reason not to get to know your profile more.
Avoid using your personal credit for business purposes: Separating your personal and business credit usage is important. Using your personal business credit will not help you build a strong business credit profile and may even damage your personal credit score.
Establish trade accounts with your suppliers: The establishment of trade accounts with your suppliers is one of the best ways to start creating a credit profile. If your vendors do not sell commercial accounts, there are companies such as Staples, Home Depot, or Lowes that offer a lot of the products that small businesses do.
Ensure that your suppliers report your good credit history to the correct credit offices: If they do not report their credit history, you may build a good credit relationship with that specific supplier.
Use the credit you need and stay up-to-date: the single most important thing you can do to build a strong profile is to use the credit you need and meet every payment commitment in a timely manner.
If you haven’t checked your credit profile lately, there isn’t a better time now than before. Yes, a monthly analysis isn’t too frequent— after all, we appear to have an effect on the metrics we deal most with. Continue reading, to learn more.
Smart Business Owners Know What’s In Their Business Credit Profile
We regularly discuss how important it is to pay attention to your business credit profile and personal credit score. It’s important to know what it looks like, before you can make a positive impact on your profile. One of the single biggest things you can do to boost a poor profile or to build a strong profile from the earliest days of your company is constantly checking your profile.
It may be an uncomfortable truth but it will not happen overnight. There are no quick fixes to boost a poor business credit profile, this race is truly slow and steady to win. Nonetheless, there are a number of things you can start doing today, which in less time than you might think will have a positive impact on your profile.
We took a deep dive into business credit earlier this year and looked at the business information credit offices, such as Dunn & Bradstreet, gathering about your business. We also shared five items that you can start doing to boost your profile today.
Five Things to Improve Your Business Credit Profile:
Although a strong business credit profile is not a guarantee that you will get the funding you might want, it will provide a business with a poor credit profile with additional options unavailable.
- Get Familiar With Your Profile: While it may sound overly simplistic, updating your profile on a regular basis is one of the most important steps to help you build a strong credit history. It will give you the opportunity to make sure that there are no errors that can impact your profile negatively, and as business people, we continue to have an effect on the metrics that we pay the most attention to; daily analysis is the first step towards enhancing the business credit profile.
- Avoid Using Your Personal Credit for Business Purposes: This can be difficult for many businesses, particularly for earlier-stage businesses that have not yet built a strong profile, but not only does it not construct your business profile, but it could also even hurt your personal credit score.
- Establish Trade Accounts With Your Suppliers: This is one of the easiest ways to get a strong credit profile set. It may not be a small business loan but many vendors and suppliers offer their best customers terms of payment. It is a great way to build a positive track record which is what borrowers want to see before providing a small business loan to your company.
- Document your good credit conduct to your suppliers: this is an important step. If not, your good credit conduct might help you build a strong relationship with that particular supplier, but it’s not going to help you build a stronger business credit profile, even if something unexpected happens? Your business’ track record will help them determine the answers to those questions, so making each and every payment to your suppliers, your business credit cards, or other small business loan, is critically important.
- Use the Credit You Need and Stay Current: The biggest thing you can do to build a strong business credit profile is this one. Lenders measuring the creditworthiness of your company are really looking for answers to three very important questions; 1) Can you repay a loan? 2) Do you want to repay a loan? 3) Do you make any payment on time, even if something unexpected happens? The track record of your company will enable them to find the answers to those questions, it is therefore extremely important to make any payment to your vendors, your business credit cards or any other small business loan.
When was the last time you checked your credit profile for the business?
If you haven’t recently, the major business credit offices, such as Experian, Equifax, and Dun & Bradstreet, can help you to review the information they have gathered about your company. And other organizations can also help you learn more about your business credit profile, including our partners at Nav, will help you learn more about your credit profile. If it was a while, then there is no time like the present. If you have updated your profile frequently, please share with us how you did it. Has that had a positive impact on the credit profile of your business?
Author Steve Maleh
A seasoned businessman and 3rd generation entrepreneur, Steve Maleh has founded and started dozens of businesses over the past twenty years. From retail, to restaurants, to technology, several of which were sold, and several of which are multi-million dollar operations today.
Prior to his venture into the mobile space, Steve used his Architectural degrees to build, develop and renovate over 30 million dollars in real estate.
In addition to his own businesses and ventures, Steve has been actively sharing his expertise and knowledge with other entrepreneurs. Acting as an angel investor in several start up retail businesses.
Steve Maleh holds a Bachelor’s degree in Architecture and entrepreneurship from the University of Miami, and has also taken master classes at Columbia University in real estate developing and entrepreneurship.
Steve is currently looking forward to being part of the future innovation in the theatre application market with the launch of his new technology venture SNAX®.