Growing a business is not like a walk in the park; it entails a hard journey through life. Business involves steady building and maintaining good credit to grow multifold and thrive. The reality of being a business owner means having to face situations where – clients bailout from paying up on invoices that are generated, and that can stop all cash flow, which hampers the payments one has to make at the expense of the business.
Are you a business owner? Are you finding it hard to maintain a good business credit? Well, fret not! Here are five ways to help you with your business credit repair.
Make All Payments Timely – Not being able to pay up on all your past-due payments can affect business relationships with your vendors, apart from the obvious business credit scores. Rebuilding your business credit can be done by making payments on time, especially to trade references.
It will also demonstrate that you, as a business, are the financially responsible one. This can even mend your business relationships, and get you the required respect amongst your vendors.
If you’re not in a position to pay back all of your payments or death on time, make sure to pay all the larger invoices. Covering your largest costliest debt can help limit the damage on your business credit. If somehow you are still struggling to make the payment on time, calling up your creditors and getting more favorable terms for payments can make the process easier for you.
- Decrease the Level of Debt on “Revolving Credit” Accounts – Business credits scores I have impacted the amount of debt you incurred. Apart from that, lenders also consider one’s rate of utilization. In simple terms, it just means that lenders analyze the amount of that you have versus the amount of credible credit that is available to you.For example, if you owe $2000 on a credit card but have a credit limit of $4,000, it automatically shows that you have used up 50% of your available credit limit. This just goes to show that your rate of utilization is 50%, which is a high percentage when it comes to seeing the amount of hurt that could cause your credit score in the future. Lenders always look at this to determine if you are a good fit to lend more money.Trying to reduce the amount of death that you incurred, you want to make sure that your utilization rate is under the 30% mark on all revolving accounts. Ideally, you should always just charge your credit card with the amount you can pay off at the end of every month.
- Readapt All Past Dues – Say you miss your past due? Does nothing to really here all you have to do is contact the creditor and make a deal with them that is favorable for you as well as them. For example, you will be liable to pay up extra if you have consecutively missed 6 to 7 payments on time.Doing this will ensure that you will not have any negative remarks order link with fees shown in your credit report.
- Open More Accounts Without Closing Any Previous Ones – If you own a business, it is normal to have at least one or two credit accounts. If you don’t have that, that does not equate to having bad credit. It just shows that lenders will have a hard time evaluating your credit history because you have none. Opening multiple new accounts for lines of credit sets up a payment plan where you can pay up on time, which makes you look a responsible businessman with financial responsibility. Therefore, open up new lines of credit while not closing the old ones.
- Hire Credit Repair Companies – Credit repair companies are built to help novice business and even the more experienced to solve their business credit repair issues. Hiring them will ensure that you don’t have to go through all your accounts and find a solution. They will go through your account details, your debt, the credit history, credit score, credit repair, lines of credit and even your rate of utilization of credit – and come up with a specific payment plan that aids in helping you pay off all debt, getting your credit score repaired, thus helping the business grow steadily.
Follow these five steps ardently to repair your business credit.