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Small Business Owners And Their Credit

At the end of February Knoxnews.com posted an article concerning business owners and their credit and how to improve it. They asked a common question that a business owner would ask and then replied to them with knowledgeable feedback that was very beneficial. They covered everything from having previous potential bad credit to how to make sure your credit score is correct.

The article expressed that a business owner could expect to successfully begin to rebuild their credit in a matter of six months, but they also expressed ways to ease the process. Using references from a popular credit website they expressed that there are ways to greatly improve your credit without going through a whole lot of trouble. It was advised to begin with checking your personal credit report, to guarantee there are no errors within it. The website reference they used stated that “one out of every four credit reports have serious enough errors to cause a negative impact”, so double checking your report is worth the time and effort.

If any mistakes are found it was said to report them to the appropriate agency as soon as possible so then the problem is fixed promptly. 35% of your credit score is said to come from your payment history, so paying your bills on time or even early is highly recommended as far as if you are trying to earn a positive credit score. According to the article the rest of your credit is broke up as 30% is the amount that you owe, 15% is the length of credit, 10% types of credit used, and 10% being new credit. The end goal of a person trying to build credit is said to keep their revolving credit also called your credit card debt, below 25% of your final credit limit.

If a business owner is trying establish a good standing they should first make a good relationship with 4-5 vendors, paying all bills on time or even early. Make sure to avoid bouncing any checks, also having a positive interaction with your bank is needed, because if you want to stand out among the crowd as far as businesses go, getting a D&B number is a must. D&B is short for Dun & Bradstreet, and creating a business profile is a very profitable effort, D&B asks for references from your bank and a vendor, then they begin a investigation, and afterwards rate your business and give you a D&B number. Potential vendors will most likely ask for a D&B number if available at the time of a credit application. The upside is that most businesses do not have a D&B number, so it reflects better on a business and makes them appear bigger than what they may actually be.

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