You were expecting Twelve Days Of Christmas, perhaps?
When you’re heading into a new year, you need all the help you can get. That’s especially true when it comes to business credit. With excellent credit, you have access to the financing you need and the trust of partners. With terrible credit or none at all, you’re in dire straits.
Our guide to all things business credit is Mike O’Connell, one of Direct Capital’s in-house experts. The following seven tips are common sense, easy-to-remember tips to improve and maintain your business credit in 2012 AD. Buckle up.
- Know where your information is being published. Even if you don’t have a website, chances are good information about your profits, number of employees and more can be out there at places like Manta. Scrutinize that information and make sure it’s correct to ensure your credit isn’t being affected.
- Check over credit bureaus. Particularly Dun & Bradstreet, which O’Connell says can also have inaccurate information. Don’t be shy about calling and correcting the record to help fix up your Paydex score, a score which matters a lot when you’re looking for financing.
- Have a company website. This is 2011, after all.”If you’re operating a business of any kind, you need to have a website to showcase your company,” O’Connell said.Why? Simple. With inaccurate information out there, you want to be able to offer accurate information straight from you. Having a website also lends your business credibility with lenders.
- Be aware of fraudulent charges. Nothing puts a dent in your credit faster than someone stealing your identity and running up a bunch of charges, especially if you fail to notice. O’Connell advises you to carefully monitor your accounts and be extremely aggressive about following up on any possible fraudulent charges. It will save you a lot of headaches and a cannonball through your credit.It pays to carefully vet employees and partners to ensure you won’t be dealing with fraud from them, as well.
- Pay on time. The simplest way to damage your credit is to simply fall behind on payments. Ensure all payments are being processed in a timely fashion and that you don’t bite off significantly more than you can chew. It may be a long time before you’re able to get lending again if you don’t. O’Connell said the Automated Clearing House (ACH) network, which processes payments in batches, can make this significantly easier.
- Ensure you can trust re-sellers and have working equipment. Nothing removes your motivation to make payments worse than a seller or re-seller who builds in new charges or gives you non-functioning equipment. Falling behind because of hidden interest or legitimate grievances isn’t fun, so choose your providers carefully.
- Establish a credit history. This one’s really more for start-ups. If you’re someone who doesn’t believe in credit cards or loans, you may find yourself in trouble when you desperately need one. Credit bureaus frown on those businesses without a credit history, so establish one through judicious use of cards and financing.
We hope this advice will help your small business succeed in 2012. If you have more advice for your fellow small businesses, share it in the comments!