How To Improve Your Business Credit Score

Many credit-scoring models rely on a person’s ability to make timely payments. While this ability may not be the primary factor in determining a person’s creditworthiness, it can impact their score.

This article will break down how to improve the business credit score.

An Excellent Payment History

It is a fact that people with a history of on-time payments will have a much better score than those who frequently miss due dates. According to Lantern by SoFi, late payments do hurt your credit score, but it’s still possible to get loans with bad credit if you ensure other areas of your credit report are up to par.

Compared to other credit scores, the business scores do not just look at one factor determining someone’s financial standing. The payment history is just one of many factors that go into a business credit score.

An Inferior Debt To Available Credit Ratio

A low debt to available credit ratio is another way to ensure a good business credit score. When there is a lot of debt but not much available credit, it might suggest that the individual cannot pay for the items they are purchasing on time. It, in turn, adds to their overall credit score negatively.

A Low Rate Of Inquiries

Because the business credit score is determined by the overall financial standing of the person, an individual who has very few or no inquiries on their report is going to have a much better score than someone who has many inquiries.

A Clear And Accurate Bankruptcy History

If someone’s business credit score is not too bad, it helps when their bankruptcy information seems accurate and complete. It helps to make the score look even better. The clear and complete information will demonstrate to the credit bureaus that the information provided is truthful and accurate, making it difficult for someone to get lower scores.

A Low Balance Of Past-Due Accounts

When compared to other forms of credit, the business scores consider just how many different types of accounts are present on an individual’s report. With a low balance of past-due accounts, it indicates that the person is consistently paying their bills on time and therefore has a better score.

A Strong Mix Of Credit Types

Another factor that goes into determining a business credit score is the type of accounts present on the individual’s report. A good mix of different types of credit accounts will not only help with the current score but will help with future scores as well.

An Excellent Mix Of Installment And Revolving Accounts

One important factor in determining the business credit score is the mix of different types of accounts. The mix of accounts tells the credit bureaus how someone spends the money and what type of loan payment options someone chooses to use.

Having a low ratio of revolving accounts to installment accounts will make it easier for someone to qualify for a business loan or credit card.

A Low Number Of Late Payments

When comparing the different credit scores, a high number of late payments will always hurt an individual’s score. Since all three credit reports are compared when determining a business credit score, it pays a low number of late payments across all three reports.

The important thing to remember is that the business credit score is not overlooked. The included factors are significant and can make a huge difference in someone’s overall finances.

Yashik Patelhttps://bloggingdart.com
Yashik Patel is a Google Certified, Digital Marketing and professional Blogger. He has 5+ years experience in SEO, SEM and ORM (Online Reputation Management) field.

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