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How to improve your business credit

Written by:
Mollie Carberry
Published on:
January 3, 2020

Your business credit score - or business grade - is a measure of your creditworthiness or rather,  the evaluation of how trustworthy, stable and financially healthy your business is. Your business grade is used as a key indicator to determine how quickly you’ll be able to pay back loans, make payments on your business credit cards, and make good on other business transactions such as renting new spaces or buying equipment. 


To put it simply, your business grade has a huge impact on the future of your business. 


A number of factors contribute to your credit including what you currently owe, how promptly you’ve made previous payments, how much credit you’ve used, and other general information about your business (like how old it is and what industry it operates in). 

No matter what your starting point, it’s always possible to change and improve your number. There are many ways you can work on raising it, and regularly check up on it to see how it’s going.

Here are some practical steps you can take to start improving your business credit:


1. Make prompt payments your priority


One of the most fundamental ways to push up your score is by making payments on time and in full, every time.

Struggled to make payments on time in the past, or missed a few deadlines? It’s never too late to rectify.

Make sure everything you currently owe is paid off as quickly as possible, then move forward ensuring that any future payments and bills are handled swiftly. If you have to reorganize and reshuffle your finances to ensure this is handled as a priority every time, do it - this way you can make sure it doesn’t get out of your control.


2. Look after your cash flow


Another key way to boost your business credit is by maintaining healthy, consistent cash flow. Stable cash flow is a great indicator of overall business health, which is what lenders are always looking for when making decisions on approvals. 

Ensuring that your payments don’t get declined, cheques don’t bounce and everything ticks over as smoothly as possible month after month is a great way to build up stability and trustworthiness.


3. Don’t mix up your accounts


Alongside staying on top of payments and cash flow, try to firmly distinguish between your personal and business accounts at all times. Keeping your finances separate is crucial when it comes to business credit. 

Your personal finances and your business have entirely separate credit scores and you don’t want one bringing down the other. This applies even if you’re a sole proprietor or small business owner. 


4. Add a business credit card to your wallet


Whether you think you need one or not, applying for a small business credit card is the ideal, low-maintenance way to gradually build up a fantastic credit score. 

It helps you keep track of business expenses and allows you to easily separate them from personal purchases. Use it for regular small payments and pay it off speedily and in full - it’s a simple way to build business credit. 


5. Transparency is key


One of the most important things to remember when it comes to your business credit is awareness. To improve it, you have to know what it is. Don’t shy away from checking or wanting to improve it before you’ve even researched it. 

Whether you’re an Ario partner or signed up to one of our partner’s payment platforms, Ario allows you to check in on your business grade, provided through our credit bureau. Signing up doesn’t impact your credit score thanks to our credit partners who carry out soft checks, which won’t even show in your credit history. 

Ultimately, the best way to improve your business credit is by being transparent and realistic with yourself. Monitor where you’re currently at in your business spending, build your score up over time with prompt payments and prove your creditworthiness with the help of platforms like Ario.

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