OF YOUR BUSINESS'S

CREDIT WORTHINESS

5 C’s

Most small business owners work hard to keep their businesses running smoothly, but often forget and undermine the importance of taking care of their business’s credit rating. Creditworthiness plays a big role when you need to look for financing options through business loans or alternative financing sources such as invoice discounting services to support or grow your business.

So how do you ensure that your business is creditworthy?

These 5 C’s below will help you do just that.

Clear your dues on time

Defaulting or delaying paying your bills on time will affect your credit rating negatively and can impact any chances of securing much-needed financing for your business. Paying up on time will not only affect your company’s credit score, but it also helps you maintain a good relationship with your creditors.

1

Clean your debts and limit credit usage

Owing varying amounts to different lenders will play an important role in

your business’s creditworthiness. Limit all such debt and credit usage to

ensure that you don’t face adverse situations when you actually need the

money. Remember, keeping your debt levels low will decrease your credit

utilization, thereby increasing your credit rating.

2

Check your business’s credit report regularly

Many small business owners tend to ignore keeping a tab of their com-

pany’s credit scores, but this practice can have an adverse impact in the

long run. It is imperative to regularly go over your credit reports to avoid

errors that can lower your credit score and the overall creditworthiness

of the business.

3

Create a credit history

While this may go against what most people believe in, remember that creat-

ing a credit history gives lenders something to assess your company’s credit-

worthiness by. Make sure you pay any bills well before the due date. Not only

will this build a credit history, but also reflect in your report as timely pay-

ments, in turn improving your company’s credit score in the process.

4Credit history

Correct all errors

Even the simplest of mistakes or errors such as a wrong address or inaccuracy

in your name can massively impact your company’s credit rating. Any mistake

on the credit report, however small it may be, should be corrected at the

earliest.

5

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