If you have been having a difficult time taking out small business loans because of bad credit over the past few years, then worry not, you are not alone in this struggle. There are thousands of people who have fallen victim to bad credit scores and reports over the years. Unfortunately, if you wish to take out a loan on adecent interest rate, it is imperative that you have a decent credit score.Bad credit will affect everything, including your insurance premiums, interest rates, and loans.The same goes for small businesses. If you feel your small business’ credit needs a tune-up, here are some tips you can follow:
Try To Catch Up On Missed Payments
If you’re experiencing extreme difficulties in making your payments, try to figure out a payment plan with a non-traditional or a non-profit credit agency which can either loan you out or try to negotiate a good payment plan with your creditors. It is important to understand you have to start somewhere.
Pay Your Utility Bills, Other Debts, Rent on Time &Be Consistent
It is imperative you realize your payment history is the most important factor in determining your credit score. If you’ve been making your payments on time, you can request the utility companies to write a letter of recommendation so you can show it to your creditors once you apply for a loan. And to be sure you’re making your payments on time, get all your monthly expenses paid off automatically from your bank account.
Improve Your Credit Score by Applying For a Card
Once you see things change, apply for an unsecured credit card, preferably for a departmental store. Why? That is because department cards can easily be applied for and you need minimal requirements to qualify for one.Keep at it, start by consistently using your card to make timely payments for around a year and then apply for a proper credit card.
All in all, these are some effective ways you can improve your credit score and enhance your business’ credit to ensure you qualify for loans and other credit lines when you need them.