Running your own company is an immensely time consuming process and there is so much to think about. It can be an arduous task indeed taking the helm of the ship. As for steering it in the right direction, well that’s even more onerous.
One of the most crucial things to consider is financing your business. Who will provide the funds? How will the lenders view my business?
Typically, lenders will look at your business credit profile when making lending decisions about your business. The real question is: what can you actually do to grow your business credit profile?
Ultimately, when it comes to growing your business credit profile, there are numerous considerations and activities that could help. Here, we present 9 top tips to help you on your way:
- Synchronise your company data and ensure it’s standardised across the board
Whether you’re applying for a new business bank account or submitting an application for credit, ensure you always provide the same information to avoid issues related with inconsistent data. Using multiple different addresses for example could cause confusion in the future or even the risk of a duplicate credit file.
- Make use of any credit you already have access to
If for example you have a company credit card, showing regular and responsible usage can contribute towards building your business credit profile.
- Ensure that your business credit profile represents a ‘real’ business
If you have a complete and honest profile for your business, with all information being accurate, this can contribute to your credibility and creditworthiness. If you masquerade behind a number of different trading names, this can potentially be detrimental for your profile.
- Pay your bills on time
It goes without saying that meeting your obligations in a timely fashion looks good. If this is even a remote possibility for you, and it works well for both parties, then why not get things sorted as soon as possible.
- Own and manage a diverse portfolio of credit accounts
Using different types of credit can be a sign of responsibility and stability. Be it short-term loans or leases, each account will contribute towards your ability to boast a diverse portfolio of credit usage.
- Be prompt in your corrections of any inaccurate information
Upon spotting any mistakes on your file, it’s important to get them rectified as soon as possible. Each relevant agency will likely have their own procedures in place for resolving such disputes, so it’s important to familiarise yourself with their processes and procedures before contacting them.
- Ensure that your SIC code is as accurate as possible
Ensure that your principle activity is communicated clearly. This isn’t just for the benefit of creditors, but it’ll also assist prospective customers too in unpicking and understanding your operations. If you started up as a tech company and have moved across into retail, has your SIC changed too?
- Submit financials and submit them on-time and in-full
As far as tangible evidence goes, does it get much better than your company’s financials? Reports such as cash-flow, Profit and Loss among others could contribute towards your overall creditworthiness, so it’s important to get your financials completed and submitted.
- Monitor your business credit profile as regularly as is possible and practical for you
As good as it is to build up your business credit profile, it’s potentially of equal importance that you should consider monitoring it too. As for how often you should do this, there isn’t a right or wrong answer, but be it monthly, quarterly or perhaps annually, whatever you decide upon, it’s an important consideration. Suffice to say, being made aware of any changes in your score at the earliest possible opportunity will allow you to act quicker in trying to rectify any issues.
With Experian’s My Business Profile, you’ll be able to not only access and view your business credit profile, but you’ll be able to monitor it too, in real-time. With automatic alerts about significant changes to your report, My Business Profile can help you to act quickly to reduce any negative impacts to your score, helping you to make sure that your business is seen in the best possible light by lenders. To find out more, please click here.