8 Ways To
Maintain A Healthy
Business Credit Score

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 8 tips will help you maintain a good credit score to use to your advantage.

1. Don’t enquire online for finance

The number of enquiries you make is reported on your credit report and can affect your ability to obtain finance. Banks and other lenders look at how many enquiries you’ve made in the last 12 months.

Even if you have paid your overdue debts, it doesn’t mean that they automatically drop off your credit report. In fact, even when you’ve paid them in full, they can remain on your report for up to 7 years.

Earning more money does not automatically improve your credit score either. Your credit history is what it is, regardless of what your earnings are.

2. 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.

3. Keep your business and personal credit separate 

Mixing the two can have a negative effect on both your personal and business credit reports.

4. Pay your bills on time or early – EVERY 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.

5. 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.

6. 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.

7. 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.

If you know you are entering a cash flow quandary, seek our assistance well before it happens as we may be able to help you with cash flow funding options.

8. 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 your score, the better your prospects of qualifying for a business loan.

It is always best to contact us directly when seeking finance for your business as we have the skills, expertise and knowledge on lending criteria that will reduce the need to apply to multiple lenders.

We will help prepare your finance application and present it in the best light possible for your finance to be approved.

You’d be crazy to try to do this yourself.

Sources:
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/

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If you know you are entering a cash flow quandary, seek our assistance well before it happens as we may be able to help you with cash flow funding options.


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