How to Raise Your Credit Score

Whether you’re a business owner or an aspiring entrepreneur, there’s little doubt that the availability of capital and sources for loans play a critical role in your overall success. Your eligibility for a loan depends largely on your company’s credit score and credit history, as these two factors determine how much money you can get and at what interest rate. If your company has a good credit score, you’re more likely to receive more funding at lower rates, but if your company has a bad credit score, it’ll be nearly impossible to get any funds.

So what qualifies as a good credit score? And what factors contribute to a good or bad credit score? We’ll answer these questions and many more as we explore credit score ranges and outline the profile you’ll need to keep your business going.

What Are the Rules for Business Credit?

Business credit scores are just as crucial to businesses as to individuals. Scoring systems are used by banks, creditors, and other financial institutions to assess a company’s creditworthiness, just as they are used to determine the creditworthiness of individuals.

A business’s credit score reflects how well a company manages its debts and other financial obligations. It indicates a company’s trustworthiness and credibility in the eyes of potential creditors and lenders. Lenders typically charge higher interest rates or deny loan applications from companies with lower credit scores because those companies are considered riskier bets.

What Is a Good Business Credit Score?

For businesses, the stakes are high when it comes to creditworthiness. Business credit scores run from 0-100, with a score of 80 or more usually meaning that the company can repay any outstanding loans on time. While lenders use an individual’s credit score to evaluate their capacity for responsible borrowing, they look at a business’s credit rating to decide whether they can be trusted with a loan in the first place.

What Is a Poor Credit Score?

If your business credit score is less than 70, that indicates poor financial health. It means you might struggle to repay any borrowed funds, making it difficult for you to get loans from banks and other traditional lenders, as they are understandably wary of the potential for nonpayment.

Are you overwhelmed with credit union bureaucracy and long-winded application processes? Don’t waste more time—partner with QualiFi for quick funding options that align with your objectives.

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How Long Does It Take to Raise Your Credit Score?

The answer is different for everyone and depends on many factors, such as the quality of your credit history, how many accounts you have open with a positive balance, and how many accounts you have. Raising your credit score doesn’t happen overnight. It takes time and dedication to build a good credit history. It’s important to be patient and consistent to build a solid foundation for your financial future.

How to Improve Your Business Credit Score

Improving your credit score as an organization can feel like a mighty undertaking, but it can be done with the right mindset and a strategic approach. It’s best to start with the easiest, most obvious things you can do to set your credit straight and introduce more in-depth measures in the future. Here are a few tips to get you started:

Pay Your Bills on Time

The most critical factor in improving your credit score is to pay your bills on time, every time. Payment history accounts for 35% of a business’s credit score, so it pays to stay on top of payments.

Get the Right Credit Card

When choosing a business credit card, make sure you pick one with a high limit and low-interest rates—this will help you keep your balance under control and prevent large debts from accruing.

Monitor Your Business Credit Report

You must monitor your credit reports for any inaccuracies or discrepancies affecting your score. Check all three major credit bureaus (Experian, Equifax, and TransUnion) at least once a year and dispute any errors you find.

Pay Down Your Debt

If you have high balances on your accounts, pay them down as quickly as possible. This will reduce the interest you’re paying and improve your credit score over time.

Don’t Close Unused Credit Cards

Closing an unused credit card can lower your credit score, so keeping them open and in good standing is best.

Use a Secured Credit Card

If you need help getting approved for a regular credit card, consider applying for a secured card. Secured cards require a cash deposit that serves as collateral for the account, which can help you establish or rebuild your credit score over time.

Keep Balances Low

Paying off existing debts is key to maintaining good credit, so aim to keep balances low and manageable. Pay down large balances quickly and always within 30% of your available credit limit.

QualiFi Offers Funding Options for Diverse Profiles

Your credit score can be the deciding factor when purchasing new equipment, paying your employees, or expanding. Although having a poor rating could mean difficulty securing financing, QualiFi has the resources to offer assistance no matter your credit history—whether it’s excellent, good, fair, or poor.

Ready for fast, no-nonsense funding? Reach out today.

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