Commercial credit score is what some people would colloquially call the reputation of your company in the business world. It is nothing more than a mathematical algorithm, determining what is the probability of your business paying all its bills in due time, based on your previous behavior in similar situations. The score goes from 101 to 670 where 101 represents the highest probability of delinquency, whereas this chance falls off as the score rises. So, without further ado, here are a few simple and straightforward ways in which you may improve your company’s credit score.
Regularly Check Your Score
One of the first things you need to keep in mind is that not all business credit scores need improvement. Sometimes you will be on the right track, which means that obsessing about this issue becomes completely redundant. However, it is by far the safest course of action to regularly check your score, just to make sure there is nothing to worry about. Luckily, in the era of the internet, this report is not that hard to find, although you might be required to pay a small fee to access the data. All in all, it is usually more than worth it.
Imagine a situation where you are starting a small business. First, you are taking a loan just to be able to launch it. A few months later, your business is still not profitable, which although expected, still forces you to boost your cash flow by taking another loan. A large project comes up, a project that can easily get you closer to your goals, but you still need just one more small loan to keep it running. Needless to say, this doesn’t put you in an envious position.
You see, struggling with multiple loans can be extremely confusing and no matter how insignificant the sums are, it doesn’t look good on paper. According to people from Australian Lending Centre, debt consolidation is the best course of action in such a situation. In this way, you combine all your smaller debts into a single large one.
Finding an Alternative Solution
Postponing with the payment of your bills is never a wise choice, but sometimes you simply have no choice. Your business is not making enough to cover these expenses on its own and it is already struggling with enough debt as it is.So, you may want to look for an alternative solution. This usually means putting your personal money into a business until it’s back on its feet. You can do this by either dipping into your savings account (not recommended), selling an asset (a car or a property) or by financing it with the help of your day-job. Even though it may seem a bit unorthodox, in this particular situation, the end justifies the means.
Don’t Get Lazy
By following these few tips and by demonstrating some patience, in time you are bound to get your company back on the right track. However, this doesn’t mean your work is ever over. Your bills need to be paid on time and it is your job to make sure this is so every single month. In fact, you might want to start paying your bills the same day you receive them even if it means taking a small loan. Seeing how this significantly boosts your commercial credit score, it can be considered a good investment.
When deciding whether to do business with you or not, both your partners and your clients are all wandering the same thing–exactly how trustworthy youare. Now, although commercial credit score is never a 100 percent guarantee,it does reveal a lot about your fiscal responsibility in general. By paying all your debts in time, you may even encourage your own debtors to follow in suit.
Dan Radak is a marketing professional with ten years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.