Repair Your Business Credit Score With These Tips
Credit repair can be a real challenge for a business that has had recent financial difficulty, but it is possible to turn things back around quickly with the right set of tactics and a sustainable long-term strategy. The first step is to identify where the issue began, then to find the credit tools that are designed specifically for that issue. Often, it’s something like cash flow management that is outside your direct control that kicks things off, which means you need financing options that act as a hedge. Unfortunately, accessing them means bringing your score back up.
Ask Suppliers To Report Payment
Most of the time, the data a business credit report uses to calculate your score is rather limited. Some utilities report payments, but otherwise it’s mostly your lenders, whether that means banks, credit card companies, or alternative lenders offering industry-specific financing. You can ask other businesses who work with you as suppliers and contractors to report your payments as they come in, though. Not all of them will say yes, but if even a few do it then you add a lot of new data points to the report, changing its calculation more quickly than just paying your loans on time would.
Pay Off Past Due Balances
If you have any loans that are behind or any bills that will be reported to credit running late, take care of those first. The presence of delinquent balances is the single worst thing you can leave on your report. It shouldn’t need to be said, but there are a lot of less experienced managers and entrepreneurs out there who work on reducing balances first. Credit repair only starts after you remove the cause of the damage.
Use Existing Credit Lines Intentionally
Resources like an unsecured credit line or business credit card can be used to raise your credit score without acquiring new debt. If you’ve already opened credit lines, paying them and then reusing the open balance creates a record of timely payment even if the overall balance is making very slow progress as it goes down. Breaking that cycle is essential, because those balances do need to fall as you repair your credit, but continuing to use those resources for small draws and purchases will continue to add positive payment reports to your credit history. Even if all you do is take a small balance out of a credit line, wait two weeks, and then pay it back, it does help.