Repair Credit Before Applying
June 20, 2016
A small business that is applying for credit must diligently work to repair their credit profile in advance. Lenders use a company’s credit score to determine if they will extend credit and at what terms. Going into an application with a poor credit score really reduces the probability of being approved, while a good credit scores increases the chance of qualifying for a loan or credit line.
Credit Report Repair Services
How can businesses improve their credit before applying for a loan? The answer to this question depends in large part upon how much time a business has before they need to apply for a loan.
In many cases, a business will need funding right away. Emergencies, such as supply disruptions from a lack of inventory or the inability to meet payroll, could necessitate immediate action.
There are a few things a business can do to potentially improve their credit score in a very short period of time. They can:
Review the credit profile and dispute any errors or omissions
Contact creditors where the account is beyond terms and ask for an extension
Negotiate higher credit balances on heavily drawn accounts to improve utilization ratios.
In reality, there are few short-term fixes. A small business is much better off initiating credit report repair services well in advance of applying for credit. Building a good credit score involves:
Opening credit accounts and establishing trade relationships
Making timely payments on those accounts over an extended period of time
Avoiding using too much credit with a single creditor
Not having any liens, collections, or judgments against the company
These simple credit report repair services will put businesses back on the right path to earning a good score.
Armed with a stronger credit profile (along with a comprehensive business plan and all necessary documentation and financial statements), applicants have a much greater chance of getting the credit their small business needs.