If you are seeking outside financing for your startup, then it is vital to have a healthy credit score. Luckily, there are several ways to boost your credit score, which this article looks at.
Find Out What Your Credit Score Is
It is tough to know where you stand credit-wise if you don’t know what your credit score is, so it is wise to order a credit report. Several agencies can provide this service. Once you obtain your credit report, scan it for errors to be fixed and weak spots to work on.
Use Existing Credit Responsibly
If your business has already obtained credit, then use it responsibly. For example, if your business has a line of credit, don’t view it as a “free” source of cash; instead, withdraw only what you need and will be able to repay. And if your business has taken out a loan, diligently make payments on it to reduce the balance and stay in good standing.
Pay Bills On Time
By using your credit responsibly, you will be more able to pay your bills on time, which is a key part of obtaining a healthy credit score. Late payments adversely affect your credit rating, while on-time ones positively affect it and show potential lenders you are capable of meeting your commitments. Paying on time shows that you are both responsible and on solid financial footing.
Cut Out Extra Expenses
Removing extra expenses may not be the most obvious way to boost your credit score, but doing so can make your financials look healthier and free up money to pay back debt and handle other costs. Some small ways to do so are shifting to free software, hiring freelancers instead of full-time employees for specific projects, and keeping your office space small to cut down on rent costs. Another way, per Forbes.com, is to renegotiate contracts every to ensure the best terms possible for your business.
For more tips on setting your business up for success, take a look at Rotay Capital Finance’s other blog posts.