Most small business financing options require a good credit score and businesses that can’t offer that may feel like they are fighting a losing battle. Banks rarely approve small businesses loans, and statistics have proven that over 90% of such cases are rejected. With only 10% of the requests approved, the pressure this financial challenge can have on an entrepreneur, and ultimately a business, is extensive. But the tension is tenfold for businesses that experience bad credit. It may seem like the world is ending, but it’s important to remember that bad credit scores won’t last forever. Entrepreneurs need to know how to improve bad business credit, and that’s exactly what this article is all about.
So let’s get started and see how you can improve your credit scores.
Paying Bills on Time
If you have been missing deadlines and have failed to pay your bills on time, it can have a severe effect on your credit scores. Late payments would cause a downward spiral for your scores, especially if the creditor decided to report your tardiness. In an attempt to improve the score and gain back some worth for your business, it’s essential that you start paying your bills on time. This will help to improve the scores and enable you to build trusting relationships with your creditors.
Limited Credit Transactions
Until your credit scores regain their former glory, it’s important to keep credit transactions at a minimum. Your business may not be in the condition to bear this new change, but if you are adamant about improving your credit scores, this is a sacrifice you should be willing to make. It’s important to keep any revolving debts to the least possible level. Once you keep your debts low, it’ll give you a great chance to get your credit ratings high in due time. You may have to make a few sacrifices to achieve this, but the step will provide you with financial freedom that’s hard to get in the stated circumstances. The credit scores you gain will be worth all the trouble you go through, so don’t worry and stay determined.
Refrain from Closing Accounts
The first thing most people do when they have bad credit is close their accounts. This may be the biggest mistake you can make when it comes to improving your credit scores. You may think that removing them from your credit report may tone down the damage done by these accounts, but it’ll just bring about some new problems for you. Some entrepreneurs make this decision in an attempt to curb down their future spending, but all it’ll do is limit your credit. It can also have an adverse effect on your business credit, so avoid closing any accounts.
Get Professional Help
Getting professional credit counselling can help you get the credit scores that spell fortune for you. There are numerous services available that can assist you in making the right decisions and improve your credit score. If you have been facing problems while making payments, it’s time you get professional help to alleviate this problem.
Don’t Apply For a New Credit Card
Entrepreneurs who’ve made a mistake of applying for a new credit card during this challenge will gladly tell you that this is the worst step you can take during the credit repair mode. The biggest effect this will have on your business credit report is that it will lower the average credit age. You may be in need of instant funds to fuel your business, but this tactic will only hurt your credit scores further. So refrain from doing so and you’ll have a good chance of availing other financing opportunities.
There are many other lending institutions that don’t care about credit scores. They have different criteria for judging the best candidate, so your bad credit scores wouldn’t be able to harm your chances of securing the required funds.
These are just some of the ways you can improve the bad credit of your business. Just remember that this process isn’t a quick one. It’ll take time for you to improve the condition of your credit report, so don’t be disheartened by the slow process. Think of it more as a marathon and be delighted that at last you’ll have a business you’ll be proud of.
Learning how to improve bad business credit can be a saving grace process for any entrepreneur. Once you have a clear understanding of your current credit score, you can get assess your financial situation. With a good credit report backing up your business decisions, it’s easier to avail the opportunities that come your way.
Until the day your business credit scores get back on track, you may find small business financing a challenge. That’s the reality for most entrepreneurs, but don’t let it get you down. You can always opt for factoring companies and go to them for a viable financing option. This is one way you can leave your financial difficulties behind and focus on growing your business.
Want to know more? Contact Mazon Associates!