Member Article

How to: Build your business credit

In the current climate, it is becoming increasingly difficult for businesses to secure financial help. This is particularly troublesome for SMEs, some of whom have only just started trading and don’t have a lengthy business history. A good way to improve your chances of securing finance is to build and maintain a healthy credit score. At Commercial Domestic Investigations we wanted to share some steps that you can take to achieve this.

Know your score

To begin building your business credit score you must first take the time to understand it. Most reports are available for free, or a small fee. Take the time to get to know and understand your credit report, ensuring that all information is correct.

Build your score

You have now seen your report and your credit score, so how can you improve it? Start establishing accounts and try a business credit or charge card. Open a line of trade with one of your suppliers. All of these actions will help to build your score.

Monitor your credit

Now you have started to build you credit score you should monitor your report for any changes. Incorrect information or even identity fraud can heavily impact your score. Monitoring your report means that you can act quickly in the event of any problems.

Keep suppliers happy

You may think that paying suppliers on time isn’t as important as paying your bills on time, but you are wrong. Abusing the trust that you have built with your suppliers is the worst thing you can do, without this relationship your business will likely fail. On top of that, most suppliers report to credit agencies so not paying them can affect your credit score.

Choose lenders that report

Where possible, do business with lenders and suppliers that report to credit agencies. Any positive account that you hold will help to improve your score.

Credit check your customers

Eliminate the risk of non-payment by credit checking your customers and suppliers. Gaining an insight into their payment history will show you how they have dealt with their finances previously. You don’t want a non-paying customer to damage your business.

This was posted in Bdaily's Members' News section by Steve Hall .