If you’ve already taken steps to separate your personal credit from your business credit, then congratulations! However once you’ve taken this initial action, it’s important to maintain your business credit score in order to make your business as attractive as possible to potential lenders.
Listed below are four tips for understanding how you can keep your business credit score in the best shape possible.
1. Keep your balances at least 20% below your credit limits
The first way to improve your credit score is to keep your credit balances well below their limits. You don’t want to seem like you’re towing the line between making payments and being late, so try to keep your outstanding balances at least 20% below the credit limits afforded to you or your business.
2. Maintain a variety of credit types
If you’re looking to improve your credit score, you should take a look at how many different forms of credit you maintain. If you have credit cards, lines of credit, mortgage loans and more, all with consistent payment histories and no late marks, lenders and banks will be more likely to trust you.
3. Don’t open new forms of credit at the same time
You are going to want different forms of credit on your records – but you shouldn’t open up all those credit accounts at the same time, either. According to a recent report from MasterCard, those who open several credit accounts in a short period of time are considered “high-risk” by many lenders and banks. If you don’t have a heartily established credit history and you open multiple forms of new credit at once, you’ll be doing significant damage to your credit reputation – so wait a few months in between each credit card and line of credit that you set up.
4. Keep up with your payments!
Lastly, there’s one easy way to maintain a high credit score: keep your payment history consistent and clean. If you’re constantly making late payments, you’ll see your credit score dip dramatically as a result – even if you’ve always made the payments eventually. So keep an eye on due dates, and make sure that none of them pass without you making the necessary payment.
For more information about business credit scores, click here.