8 Ways Your Small Business Can Establish and Maintain a Good Credit Score

8 Ways Your Small Business Can Establish and Maintain a Good Credit Score

With bad credit, your small business could suffer greatly. You can say goodbye to any future loans or government grants for small businesses you were counting on to expand or improve your business. Most businesses rely on investments and loans to thrive. If the profitability of your business is important to you, you’ll want to keep these ways to establish and maintain good credit in mind.

1. Incorporate and Identify Your Small Business

What happens in your personal life shouldn’t directly impact the profitability of your business. If you’ve mismanaged your personal credit, your business doesn’t need to suffer unnecessarily. Incorporating your business separates your business proprietors and creators (you).

Incorporation allows for the transferability of shares in your company and the ability to raise investment capital.

Once this is done, you can apply for a tax identification number. A tax identification number essentially acts as a social insurance identification number for your business. From here, you can open separate bank accounts, allowing your individual small business credit score to build.

2. Open a Small Business Bank Account

The vast majority of banks offer special incentives when it comes to small business banking. They understand your wants and needs and make it easier for you to open a small business account. Keeping your business and personal bank accounts separate will allow you to keep things strictly professional. Separating your two accounts will allow you to begin building a rapport under your business’ name.

3. Obtain a Business Credit Card

Credit cards make spending for your small business a breeze. Just ensure you pay your credit card monthly to develop a good credit score.

Double check to make sure the financial institution that you obtain your credit card from reports directly to the credit reporting agency.

4. Regular Payments Can’t Be Missed

Regular payments allow you to show your credit reliability and build upon it. Never miss a monthly payment and watch your credit score rise.

5. Count on Your Suppliers

A line of credit with your regular suppliers can make payments easy and help you build your business’ credit. You’ll be buying all the things you would normally, just with credit plan.

6. Taxes, Taxes, Taxes

April is every business’ most dreaded month—tax month. While it may be a pain, it’s important that you don’t ever forget to file your taxes. Non-compliance can have a negative effect on your business credit score.

7. Get Listed

Dun & Bradstreet is one of the most popular credit bureaus that will create a credit profile for your business. The majority of investors, credit card companies, and lending agencies require your business’ DUNS number before you can be approved.

8. Keep a Close Eye on Your Score

It is recommended that you check your business credit score every one to two months. This way, if any errors appear, you can solve the issue immediately. Also, if you notice something affecting your credit score, you can make the necessary adjustments in order to eliminate the issue.

If you want your small business to succeed, it’s essential you follow these tips to establish and maintain an excellent credit score.


Leave your message