Growing a business requires funding. Without a decent credit score, you’ll have trouble getting a loan from a bank or credit union. If your financial standing could use some improvement, do not despair. There are fundamental ways of pushing that number higher. Here are a few that you can immediately put into practice.
Watch Your Credit Report
Request a credit report from one of the three major credit-reporting agencies. You are entitled to a free copy annually from each of them, TransUnion, Experian, and Equifax. Look closely at yours for any mistakes. If you spot something incorrect, file a report regarding the error and request that it be changed. Periodically review your report to see if any new issues needing correction have surfaced.
Watch Your Credit Card Usage
Responsibly using credit cards can help raise your credit score. Abusing the privilege of access to their money does the opposite. It’s easy for balances to grow out of control, and the interest rates that plastic imposes are notoriously unfavorable. Pay your bill as quickly as possible and avoid becoming saddled with compound interest. Stick to a budget to make sure you can pay off your bills every month. Make this task easier on yourself by maintaining a business credit card that’s devoted to operational expenses.
Watch Your Due Dates
Every financial action you take gets examined closely. When you make payments on time, it reflects well on your integrity as a businessperson. Likewise, missing deadlines harms your reputation. Spend time balancing your budget so that you’re always comfortable paying off bills. One way of making sure you never miss a payment is by setting up automatic payment withdrawals. Just make sure that you have enough cash coming in so that you don’t wind up overdrawn.
Watch Your Expenses
One key to maintaining a balanced budget is keeping costs low. Review your company’s expenditures and get rid of anything that isn’t necessary. Look for luxuries that can be spared, or search for less expensive alternatives that are just as good. For example, try using freeware rather than paying for full-featured computer programs. Hire freelancers in place of full-time employees. Consider downsizing to a smaller office or working from home. There are many innovative strategies you can use.
Having a great credit score is an important hallmark of financial reliability for any startup. Use these tips to improve your rating and reap the associated rewards.