|
Credit-reporting agencies track the creditworthiness of businesses like yours to help suppliers and lenders make decisions about which companies to do business with. These agencies collect data for reports from banks, retailers, government records, and other sources.
Potential suppliers and financial institutions may use your company's credit rating to determine how likely you are to pay your debts. The strength of your rating can impact the payment terms that vendors grant you and interest rates that banks apply to your business loans.
Keeping your credit report in tip-top shape is smart for business. Use the advice below to protect and improve your company's credit rating:
Review your report regularly
Obtain a copy of your credit report on a regular basis and review it thoroughly. Look for errors, old accounts that are still listed as active, and other inconsistencies. Be sure key supplier relationships appear. By regularly reviewing your report, you can feel confident that anyone evaluating your company will receive accurate information.
Update details
If you find that information on your report is dated or missing, take steps to make it current. For example, if your report lists a dated figure for your company's annual revenues, report the new amount to the agency that issued the report. Likewise, if your report is missing data from credit relationships that are in good standing, contact the creditors and ask them to report your performance to credit bureaus.
Fix mistakes
If you find errors in your report, contact the credit-reporting agency to discuss how to correct them. Submit fixes in writing and include your business name and tax identification number on all correspondence. Forward copies of any documents you have that support your side of disputed items, saving the originals in your files. If an error on your report is the result of a creditor's reporting mistake, contact the vendor and politely request that it remove the mark from your record.
Pay bills on time
Paying bills by their due dates will positively impact your credit standing. Timely payments reflect a history of responsible financial management.
Apply for secured credit
Banks are unlikely to grant unsecured loans to companies with shaky credit histories. But getting a loan that is secured with collateral can be a way to demonstrate creditworthiness. As you begin to pay back the loan responsibly, you will be building a stronger credit history. Be extremely careful not to overextend your use of secured credit. Doing so could result in losing the collateral to the lender.
| 
