As opposed to personal credit cards, which are used for expenses that you personally incur, a business credit card is designed specifically for business expenses, with low-interest rates and higher limits. When a credit card provider issues this kind of card, they send a report with information from all of the card transactions to a business bureau. Then a business credit report is created.
Credit reporting is the responsibility of the bureau. The business credit report goes a long way towards establishing your credibility, which means investors will look at it when thinking about putting money into your company. It will also help you take out loans and establish new business.
To make sure you’re getting the best business credit report possible, make sure to follow these simple steps.
Pay Off Your Debts
By staying away from debt on your business credit card, you can avoid a low-scoring business credit report. When you are unable to pay off a loan you took or a charge you incurred, the credit reporting bureaus consider you a less trustworthy business. This will reflect negatively on both you and your company. Even if you can’t pay off all of your debt, try to keep it below 20 percent of the total limit. This will keep your score from tanking.
Build Trade Credit
If and when you buy materials from third-party vendors, you may be given a chance to pay for what you’re buying at a later date. If you exercise this opportunity, you can request that the vendor report your dealings to the credit bureau. These reports will count in your favor when the credit reporting work is being done, and will ultimately improve your skill. Just remember to abide by the vendor agreement and pay for the items you purchase in the agreed-upon time.
Consider Using a Smaller Bank
Big banks tend to take care of large corporate accounts very well, but sometimes there’s no better way to ensure that you’re getting the service that fits you best than by using a smaller, more intimate bank. If you have work with a lender from a smaller bank, they will likely have more time to dedicate to your account, and you can check in with them more frequently to make sure that they are regularly delivering reports to the credit reporting bureau.
It’s not easy to start your own business. You have to be willing to risk a lot of time, effort, and—of course—money. But by establishing a strong business credit score, you can prove that you’re a reliable investment to both lenders and investors.
Source: http://findquickanswers.com/4-easy-steps-to-improve-your-business-credit-report/
Featured image: DepositPhotos – danielfela
