5 Ways Improve Your Canadian Small Business Credit Score
Credit scores, those pesky numbers you don’t think all too much about until you need to rely on them. From leasing a new space, applying for a business loan, or even switching cell phone carriers, your credit score will impact your ability to complete these business activities. A strong credit score is your key for flexibility, it’s time to stay on top of it – but how?
1. Pay on Time or Early
With any form of debt you take on, making late payments, not paying in full, on time and every time, will cause bad credit. Every other point made below is moot unless you’re able to hold up your end of the bargain and keep up with payments. If you know you might be spreading your cash flow too thin, prioritize paying your bills – it can spiral out of control before you know it.
2. Separate your Personal and Business Finances
Always keep the two separate, you are not your business and your business isn’t you - your personal credit history shouldn't bring your business down. It will be significantly easier to improve your business credit score using these suggestions if your account is used strictly for business purposes. One easy way to do this is by using a business credit card.
3. Apply for a Small Business Credit Card
The first step is easy, apply for a card – regardless if you need it yet or not. There are always going to be purchases you can make using the card, just take a look at your payment history, you will see tons of opportunities to put it to use. By using your business dedicated credit card instead of a personal one, it is much easier to keep track of what expenses go directly towards the business. You also get to take advantage of some pretty cool reward programs such as cash back or Air Miles. As long as you’re making all of your payments, this is one of the fastest and easiest ways to build business credit.
4. Ask your Suppliers for Trade Credit
A trade credit, or trade line, is an agreement between you and trading partner that you can pay at a later date. Sounds like a credit card, doesn’t it? It works very much the same way. Make sure your supplier will provide the status to a credit reporting organization, this is what improves your credit limit.
5. Monitor Your Business Credit
Taking all the steps to improve your credit score is great, but you’ll only be able to know how effective they are by checking in on your score. In Canada, you can use credit bureaus such as Equifax or Transunion that will not only show you your credit report, but give you tailored suggestions on how to improve it.
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