A business credit score can help or hurt your small business, depending on how high or low it is, and what’s contained in your business credit history report. Whenever you need to apply for business financing, it’s a virtual certainty that your business credit score will be consulted to determine your creditworthiness. Here are some things you can do to establish a strong business credit score.

Keep personal and business finances separate

Even if your personal finances are in good order, you should not mix personal finances with business finances. That means you should open a separate account for business credit, and you should have both savings and checking accounts to manage your business.

Choose the right vendors

Choosing the right vendors in this case does not mean finding those who can keep you supplied adequately. Instead, it means finding vendors who will report good payment practices to the appropriate business credit bureaus. While some vendors don’t bother with this at all, others make a habit of doing it regularly. If you can make sure to consistently submit your payments on time, and have this reported by your chosen vendors, it can create very good business credit history for your company.

Pay bills on time or early

Going hand-in-hand with having vendors report your good payment practices, is the fact that you should get into the habit of always paying your bills before their due dates, and if at all possible, well beforehand. This makes it apparent that you have a stable business with good cash flow, and that you are managing your business responsibly with regard to paying debtors.

Keep your credit utilization percentage under 33%

Your credit utilization ratio will be an important factor considered by banks and other lenders when calculating your creditworthiness. Credit utilization ratio refers to how much credit you have available to your business, compared to how much of that overall balance is actually in use. A company with near 100% credit rate utilization ratio would be seen as one in severe financial difficulty, whereas one with a ratio below 33% would be considered to be in good, stable condition.

Unfavorable credit score? – Contact IRC Commercial Lending

At IRC Commercial Lending, we don’t necessarily disapprove small business owners who come to us with very little credit history, or a history which is less than perfect. Contact us today, and we can discuss your eligibility to receive the kind of funding which will help you run your business better, and have a chance at real business growth.