Do you run your own business? If so, it pays to keep a healthy credit score.
Having a good business credit score improves your ability to secure finance to grow your business.
These 6 tips will help you maintain a good credit score to use to your advantage.
1. Check and monitor your credit score
Knowing your score and details of your report is the first critical step. Review your report at least twice a year. It is important to keep on top of any changes or possible discrepancies.
2. Pay your bills on time
This is one of the easiest ways to improve your business credit report. Set up a good accounts payable system so you are aware of due dates to make payments on time. Schedule automated payments for regular monthly bills.
3. Build relationships and establish a credit account with suppliers
Work with your vendors and suppliers to develop payment relationships that can contribute to positive payments on your file.
4. Dispute any errors
It is important to ensure that what is on your credit report is accurate and up to date. If you see something on your credit report that should not exist, dispute it. Genuine mistakes can happen. Credit bureaus are obliged to correct any errors.
5. Monitor your cash flow
It is important to monitor your business cash flow to determine your ability to pay your bills. Paying your bills on time can have a positive impact on your credit file and score.
6. Keep your ATO payments up to date
Australian Taxation Office (ATO) debt could impact your business credit. The ATO could report businesses that owe more than $100,000 in tax that is more than 90 days overdue to credit reporting bureaus1.
A business credit score is used by lenders, and sometimes suppliers, to determine your creditworthiness.
Having a good credit score may help you to secure capital. It is important to ensure your credit score remains at a positive level. The higher the score, the better your prospects of qualifying for a business loan.
Contact us today. We can help you understand your credit report and the actions you can take now to improve your ability to secure your future business finance.
1 Australian Taxation Office, Disclosure of business tax debts: https://www.ato.gov.au/General/New-legislation/In-detail/Other-topics/Disclosure-of-business-tax-debts/