Just like personal credit scores, business credit scores are based on financial history and it tells lenders and suppliers how good you are at paying debts.
What does a business credit score portray?
A good credit score means that you are fast at paying debts and bills so anyone is happy to do business with you.
Some of the major advantages are:
- Suppliers will probably give you more favorable payment options.
- Lenders will give you better access to credit and capital.
How to get a good credit score.
Here are tips on how you can improve your credit score when you don’t really know all the things that go into it.
- Know what a good credit score is – Its never about points so having 4 out of 5 or 75 out of 100 is never an issue, most business will be comfortable working with you so long as you are not in the bottom quarter.
- Review your business credit score three to four times a year – always keep track on your vendor’s feedback some could have mistakes and you are entitled to a correction.
- Pay bills on time – this is the most basic tip because most of your business credit score will come down to on-time payments. If you don’t have an accountant, you can use accounting software’s to automate payments so that you don’t forget.
- Be upfront if you are having cash flow issues – every business runs out of money from time to time. If that is affecting your ability to pay bills, don’t be shy to call your vendors and explain, with that they will be far likely to report you to a credit scoring company.