Establishing a healthy line of credit for you and your business can play a vital role in your business’s continued growth. Maintaining a good credit score enables your business to secure the funds necessary to pay for the various assets that keep your company running smoothly. This article will provide New York businesses with guidance on achieving and preserving good credit.
Maintain Good Personal and Business Credit History
Existing businesses have the advantage of an established financial history. But loan eligibility for a new business is typically based on its owner’s personal credit score.
While not every small business owner has good credit, some may in the first stages of establishing credit. The Consumer Financial Protection Bureau (CFPB) offers tips to help people with limited credit histories get started.
CFPB’s Credit Reports and Scores webpage is a good place for most people looking to burnish their credit history and improve their scores.
How Can I Improve My Credit Score?
It takes time, but you can improve your credit by paying your bills by the due date, paying off debt — especially on your credit cards — and not taking on new debt. Paying bills on time and having low balances can help you build a solid credit history. If you’re in debt and need help, a reputable credit counseling organization might be able to help. Good credit counselors spend time discussing your entire financial situation with you before coming up with a personalized plan to solve your money problems. They won’t promise to fix all your problems or ask you to pay a lot of money before doing anything.
You often can find non-profit credit counseling programs offered through
- credit unions
- universities
- military personal financial managers
- Cooperative Extension Service branches
Monitoring Your Credit Scores
Reviewing your personal and business credit reports provides data to help you continue improving your credit scores. The general recommendation is to review your credit reports annually; however, it may be more prudent to check them quarterly. There is a common misconception that checking your credit score can negatively impact it. The fact is that personally reviewing your credit score, also known as performing a soft credit check, will not affect it. However, hard credit checks, the reviews completed by creditors or lenders, may impact your credit score.
Credit Monitoring Tools
You can review your personal credit on AnnualCreditReport.com, the only credit reporting site authorized and guaranteed by Federal law.
There are several viable options to choose from to check your business credit. Some of these options include:
