If you run a business, at some point, you will need credit (aka loans). And to get this credit, you will need a healthy credit score. It is a three-digit number that’s calculated based on your credit and payment history, type of previous borrowings, credit utilisation history, etc. The higher your credit score, the more likely you are to successfully get the loans you need. That’s why it’s important to have – and maintain –a high credit score.
Here are 3 ways to boost your credit score.
To maintain a good credit score, you must manage your current liabilities including:
- Credit lines
- Term loans
- Any secured or unsecured loans
- Credit card balances
Review your debts and repay them as soon as possible.
#2: Maintain Low Credit Balances
To maintain a high credit score, your credit balance should be low. In general, credit utilisation of 30% can help you increase your credit-worthiness and credit score. That said, different credit bureaus use different credit utilisation figures. Check the credit utilisation of the credit bureau who prepares your Credit Information Report (CIR), and plan accordingly.
All lenders prefer to lend to borrowers who can show a long credit history. So if in the past, you have borrowed funds on credit and repaid them in full and on time, you will appear more credit-worthy. A credit account that’s at least a few years old indicates that your business is financially stable, which will then translate into a healthy credit score.
Conclusion It’s vital to maintain a healthy credit score if you want to increase your company’s chances of successfully borrowing funds in future. And to boost your credit score, make sure you follow the three strategies explained above.
