How to build business credit fast

Your business credit is a collection of data that helps predict whether or not you’ll repay money that you owe. Factors in your credit include business debt coverage, business debt usage, business revenue trend, personal credit, personal debt coverage, and personal debt usage.

When it comes to borrowing money, your credit is a key factor in any lender’s decision. So it’s important to know both how to build business credit fast and how to employ long-term strategies that will yield lasting results.

One fast way to begin improving your score is to correct any errors that may be on your report. It’s crucial to be proactive because research indicates that up to 1 in 5 Americans have mistakes in their report. Consistently check your reports from the 3 major credit bureaus and take action any time you find an error. Being an advocate for yourself in this way can yield fast results.

Another easy way to build your business credit fast is to sign up for automatic payments for any recurring payments you have. Small business owners are notoriously busy, so it’s easy to forget these kinds of details. But late or missed payments can drag your score down.

Rather than allow for human error, sign up for automatic payments with the payee. If that’s not possible, you can add them as a payee with your banking app. At the very least, add regular reminders to your calendar so you can avoid payment-related blemishes on your credit report.

You also may want to consider consulting with a credit counselor. These experts have the training and resources to help you create a long-term strategy for building your small business credit.

Because business tenure is an essential element of business credit, it can be difficult for newer businesses to qualify for some types of financing based on their credit record. In these situations, personal credit becomes a solid stand-in.

Remember, your personal credit is already a component of your business credit, so it makes sense that a lender would be content to base their decision on your personal track record. If you’ve reliably paid your mortgage and car payments, you’ll likely treat your business loans with the same diligence.

If your small business credit isn’t yet quite where you’d like it to be, some financing options aren’t as demanding when it comes to credit qualifications. These include:

  1. ACH loans: These loans are predicated on business finances, so the health of your business account far outweighs the importance of your credit.

  1. Business lines of credit: Similar to a credit card, this flexible option connects you with a revolving amount of money.

  1. Merchant cash advances: This type of financing allows you to borrow against your future earnings, so your future is more important than your past.

While there are fast strategies for building your business credit, you should also consider sustainable strategies that will allow you to generate a lasting impact. The important thing to remember is that your credit is your calling card, so make sure to make it a priority.