If you are a small business owner then you will more than likely want to have a really good credit score.  Unfortunately if you have had financial problems in the past you will perhaps have a bad credit score.  On the face if it, that might not sound that big a deal.  However when it comes to securing business financing you will want to have good credit.

Sure, there are lenders out there prepared to lend to businesses with poor credit, however you don’t get something for nothing.  If a lender is going to lend to a business with terrible credit there will a price to pay.  This will come in the form of inflated interest rates and also an increased amount of collateral in case you don’t pay your loan back in time.  There are many things that can be used as collateral and it really depends on how much you want to borrow.  However, frequently people use their own home as collateral and this can result in the lender repossessing the home.

So, as you can see, you will want to build small business credit in order to access more affordable loans for your business.  You might already know quite a bit about repairing personal credit, however business credit repair is pretty similar but not exactly the same so you need to do a bit of research before you attempt to repair business credit.

First of all you need to request copies of your business credit reports from different business credit reporting agencies.  These are Experian, D&B and Equifax.  When you do this you really need to take your time to go through all the details on the credit report.  This is because from time to time clerical errors can be made and the wrong details are showing.  Other times you could have been the victim of fraud and you didn’t even realize it.  By keeping a check on your credit reports you can act whenever you see something wrong. 

If you already have business credit cards and credit accounts with B2B businesses such as printer and office supplies then that‘s good.  If you don’t have any then you should open a few up.  Office Depot and Staples are both good companies to create accounts with.  As long as you are good with your repayments they will report to the credit agencies about this and this is a very good way to increase your credit score.  Make sure that they actually will do this because if they don’t then it’s just a waste of time.

You might think that if you have more credit cards than you need you ought to close them down.  Actually, this could negatively affect your credit rating.  So it’s probably best just to keep them open.  At the same time you really need to make sure you keep them in good standing by paying off your debts in quick order.  If you keep missing repayments then this can bring your score down.  By being vigilant you will increase your score over time.  You have to be patient because there are no quick fixes.

Most people have less than perfect credit scores however there are those whose credit score is so bad that it makes it very difficult to get a loan or credit card.  It may well be easy enough to get yourself credit whist having terrible credit however you will quickly find out that the interest rates will be much higher than if you had a good credit rating.

This can seem very unfair, especially if you think that the damaged credit wasn’t your fault.  Sometimes people go through rough patches in their lives such as illness, divorce or even a death in the family.  There are all sorts of reasons people end up with a bad credit rating however it doesn’t have to be this way forever.  You just need to know what steps to take and make sure you stick to them.  Otherwise you might see your credit score going in the wrong direction.

First of all, be aware that there are numerous scams out there claiming to improve your credit really fast.  Unfortunately repairing credit takes time and it could take months and even years to get it to where you would like it to be.  So be sensible and if it sounds too good to be true, it probably is.  Instead go with tried and tested techniques that people have used with success.

Another thing about your credit score is that it might not even be correct.  If you are really puzzled as to why you have bad credit when you feel you have been good a repaying your debts then you need to request copies of your credit reports at annualcreditreport.com.  Sometimes mistakes can appear because they have been entered into the system wrong.  So have a thorough check over everything including your NI number and loans that are listed.  In the event that you discover an error, the error should be reported and this could result in a higher credit score for you.

If you don’t already have a credit card you can apply for either a credit card for bad credit or you can get a secured credit card.  The reason you will want to take out one of these credit cards is just because you want to pay the bill off in full every month.  By doing so you can start to build up a reputation for being a prompt payer.  Make sure you only spend a small amount every month because you need to be able to afford the bill.

With the credit card for bad credit you can expect to pay a much higher interest rate however this shouldn’t be a problem if you are paying in full every month.  With a secured credit card you shouldn’t have a higher rate of interest because you are posing less of a risk to the card issuer.  This is because you place a deposit and if you don’t pay your credit card bill, the amount will be taken from the deposit you paid.  The amount of credit you receive will depend on the amount of money you deposit so you shouldn’t worry too much about getting a huge bill you can’t pay.

By being very mindful of your repayments you can rebuild your credit over time.  At the same time you should try to learn more about spending your money wisely.  For instance you could try to reduce your utility bills, insurance costs etc by shopping around for the best deal.  Also try to get into the habit of saving money to buy the things you like rather than going for a loan.  It might take your longer but it will be worth it.