How to Improve Your Business Credit Score in 2019
No matter what your business goals are for 2019, making sure your business credit score is in tip-top condition should be a New Year’s resolution for all business owners.
A business credit score allows creditors, banks and potential customers to decide whether or not to offer you credit or to even go into business with you at all. So, maintaining a healthy business credit score is the key for unlocking success and profitability for your business in years to come.
Like most things in life, there isn’t a ‘quick fix’ for improving your business credit score as it’s a reflection of your business’ payment performance and financial health over a period of time. However, there are a number of simple steps that you can take to ensure credit scores won’t hold your business back this coming year.
Get clued up on your credit score
It can often be hard to improve your business credit score if you aren’t aware of it and how it affects your business’ financial health. If this sounds familiar, then you’re in the same boat as almost a fifth of surveyed small business owners who admitted having limited or no understanding of business credit scores.
To get a clear understanding of your business credit score and how to improve it, a good place to start is with Experian’s My Business Profile which lets you see a full picture of how your business is viewed by lenders, customers and banks, and offers advice on how to improve your score.
Stay up to date with payments
Much like an individual’s personal credit score, it’s no secret that late payments can have a negative, and long lasting effect on your business’ credit score – and its ability to secure credit in the future.
So, make sure to always pay suppliers, invoices and bills (mortgage, utility, bank, etc.) on time, and avoid taking out credit if you feel you might struggle to pay it back.
File documents to Companies House on time
Although filing documents to Companies House on time won’t necessarily cause your credit score to improve, failing to do so will negatively impact your business credit score.
As well as filing documents on time, it’s important to provide full, rather than abbreviated accounts. The more information you can provide, the more accurate your business’ credit score will be.
Need some help?
There are times when businesses – through no fault of their own – are refused credit. Experian offer a specialist review service – this is helpful if your credit score needs investigation or you’ve been refused credit. This service will help you determine the reason for your business score and give you practical guidelines for improving your score.
Keep an eye on your customer’s credit scores
If a client defaults on a payment, you might be left to deal with the consequences of negative cash flow, resulting in a knock-on effect on your own business credit score.
Although this situation might seem out of your control, tools such as Experian Business Express help to safeguard against late payments by giving you a full picture of the financial health of any business.
Experian Business Express also offers long lasting peace of mind, as it continually monitors any changes in your client’s credit scores, providing you with multiple alerts straight to your inbox so you don’t get caught out by any nasty surprises.
If you’ve got your sights set on further business successes this coming year, then improving your business credit score is a sure-fire way to ensure your businesses is on track for a lucrative and fruitful year.