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5 Reasons and Ways to Build Your Business Credit Rating in 2017 Forward   

5 Reasons and Ways to Build Your Business Credit Rating in 2017

January 9, 2017


People start up businesses to make more money, but a moderate investment is needed in order to even think about opening up shop. Ecommerce based companies and businesses that sell virtual products can generally keep their operating costs lower than other business owners like baker owners and electronics retailers, but what really matters are profit levels.

Being conservative about spending and taking on business debt when you initially open your company is intelligent. On the other hand, both your business income and your business credit line is supposed to grow over time. You may not realize how much of a drawback having a poor or even non existent business credit rating is until you get rejected by the bank when you really need a speedy approval. Make sure this never happens to your company by taking in and analyzing the five following ways to build your business credit report.

1. Improved Business Credit Scores Means Lower Interest Rates

Although the credit score range that you would find on a personal credit report is far different than what’s included in business credit reports, the benefits and principles are still quite similar. Before you start shopping for mortgages for your home, scour your personal credit reports for even the smallest inkling of inaccuracies as you know how much an error can cost you when your lender sets the interest rate. Both everyday people and business owners pay lower interest rates when they don’t pose a serious risk to banks.

2. Build Your Business Credit File and See Increased Credit Limits

Credit card limits determine how much you can spend, which has a direct impact on the amount of interest and fees you pay. If you can afford not to carry a balance, paying your business credit card company prior to the end of each billing cycle will aid you in improving your rating. While your current limit on your line of business credit may be suitable in the present, you really don’t want to put yourself in a position where you have to max it out or go over the limit. Business owners who use all of their available credit each money also risk having their credit limits decreased because of high utilization rates.

3. Faster, Hassle-Free Business Credit Line Approvals

By slowly and carefully increasing your business credit score, your company becomes a positive asset to banks. Business credit lenders will see the long term benefits of working with your company, and the banks that you already have a relationship will do much more to accommodate your requests. This means that you can anticipate nearly instant credit approval decisions, both over the phone and the web. Learning that your business line of credit has been approved or increased the very same day that you put in your request will really be of benefit when you need to make fast decisions that will immediately impact your company’s finances.


4. Business Credit and Available Capital

At least one component of your business credit report is going to reflect risk levels. For banks, lending money to a company is more complex than making credit decisions concerning consumers. Although your personal score may be considered when business lenders make their credit decision, you can get away with having a blemish here and there if your business credit rating is strong. When your business credit report shows that you have multiple lines of business credit that are current, your risk levels decrease. Keeping your business credit utilization levels down gives you more available capital, perhaps leading to improved business credit ratings.

5. Being Able to Build Your Business Credit Rating Means Your Company is Growing

There’s no reason to monitor your business credit report daily but you can’t take on a set it and forget it type of attitude if you expect any improvement. Banks might want business owners who make big profits and hire scores of employees, but more important than that is consistency. If you can show that, month after month, your bills are being paid and your profits are at least remaining stable, reasonable requests for lines of business credit won’t be denied often. You will find better results by being consistent in your payment habits, and see a small by steady improvement in your business credit report that can lead to even more positive opportunities.

If you want better business credit in 2017, think about what types of credit you qualify for now. In the event that your business credit rating is not high enough to qualify for any type of line of credit, make it your goal to change this fact by the end of the year. You can improve your business credit score tremendously by employing meticulous accounting techniques, paying all accounts on time and just letting time go by as your account continues to age.




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