Your small business credit score is important. Credit bureaus begin collecting information about your business from day one, using this data to generate reports that impact your ability to get business financing, such as a small business loan. Here are some ways to establish and improve your business credit score.
Your Business Profile - Get Your Ducks in a Row
If you haven’t already, register or incorporate to get your business in the books officially. As part of this process, you will also obtain your Canada Revenue Agency identification number - this is essentially the SIN number for your business and ensures your business is identifiable as a separate entity. You can then open chequing and savings accounts in your business name, and use your business profile to apply for loans online or in person down the road. You will also want to ensure your dedicated business name, address, phone number and other key details are all listed consistently across all of your accounts, keeping in mind that any inconsistencies could signal red flags for creditors. Finally, you’ll want to contact the credit bureaus to ensure the information they have on file for your small business is accurate.
Improve your Personal Credit
Although you have established your business as a separate entity, your small business credit and your personal credit are still linked - this is especially true during the early years of your business. While you are establishing your small business credit, lenders will look closely at your personal credit history to get a bigger picture of your financial standing. This means that any steps you take to improve your personal credit (paying bills on time, avoiding predatory loans, etc.) will also improve your small business credit score as well.
Separate your Personal and Business Finances
This may seem like a no-brainer, but it’s quite common for small business owners to occasionally intermingle personal and small business finances. Many business owners use personal loans and credit to finance business expenditures or weather cash flow crunches. However, as your business matures and you set your sights on raising your small business credit score, you’ll want to start untangling your personal finances from your business completely and seek out credit solutions tailored specifically to your business. Original Source...
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