How is your small business credit score? It might be good, but it can almost always be better. If you want to give yourself the most flexibility in business, you should be looking for ways to increase your small business credit score. Fortunately, if you understand a little bit about how small business credit works, this should not be as difficult as it may sound.
Know Your Business Credit Report and Score
The first step to increase your small business credit score is knowing what your score is and what goes into it. The score you will be interested in is known as a PAYDEX® score. The PAYDEX® score is the 1 to 100 number that business lenders look at to assess your credit risk. Your business credit report is the breakdown of various facts about your business that may go into your score. By looking at your business credit report and score, which you can order online, you can determine where you are, where you need to be, and how to get there.
How to Increase Your Score
As a growing small business looking to succeed, you’ll need a PAYDEX® score that is 80 or above. Scores lower than this may make it more difficult to get the funds you need at the best rates, and that can make you less competitive in your market space. Increase your score is actually quite simple. First, make sure that your business credit profile is accurate. Missing or misreported items can hurt your score unnecessarily.
Once you’ve verified your profile, to increase your score, all you really need to do is pay your bills on time. This can be a challenge for some businesses, but, while there are other ways to increase your company’s credibility, paying your bills promptly is really the only way to get that needed premium credit score.