Building and maintaining a strong business credit profile can be an invaluable tool for any small business, particularly for businesses that rely on borrowed capital to fuel growth or other business initiatives. Fortunately, the process for managing your profile is pretty simple.
A stellar business credit profile isn't a guarantee your loan application will be approved, but you will have more options than another business with a poor profile. There are five tasks you can start doing today to immediately improve your profile:
1.Regularly review your profile
Lucky for you, the business credit bureaus make it relatively easy to view your profile, so there's no better time to get more familiar with your profile. Before you can make a positive impact on your profile, it’s important to know what it looks like. Regularly reviewing your profile is one of the single biggest things you can do to improve a weak profile or build a strong profile from the onset of your business.
The major business credit bureaus, like Experian, Equifax, and Dun & Bradstreet, make it possible for you to review the information they’ve collected on your business.
2.Avoid using your personal credit for business purposes
It's important to keep your personal and business credit usage separate. Using your personal credit for business purposes won't help you build a strong business credit profile and could even harm your personal credit score. Be certain to keep them separate by opening and using business credit lines.
3.Establish supplier trade account
One of the easiest ways to start building a credit profile is to establish trade accounts with your suppliers. If your suppliers don't offer trade accounts, companies like Staples, Home Depot, or Lowes are a good place to take the first step in building your business credit. They also offer great deals and discounts to business accounts!
4.Make sure your suppliers are reporting to credit bureaus
If your suppliers aren’t reporting your credit history, you may be building a good credit relationship with that particular supplier, but it's not doing anything to build a strong profile in general. Be certain they are accurately reporting to the appropriate credit bureaus, and the information becomes a part of your profile. It would be ashame to waste all of that history!
5.Use the credit you need and stay current
The single biggest thing you can do to build a strong profile is to simply exercise your credit and make each and every periodic payment obligation in a timely manner. This is a sure fire way to establish an instant credit profile and puts you in the driver seat to leverage your credit for your business needs.
Don't underestimate the power of a strong business credit profile. Start building yours right away!