As per research, 45% of SMEs don’t know they have a business credit score. However, if business credit score was a familiar term amongst SME owners, you’d know that it is more than a number. It plays an important role in your business’ overall success.
Beyond getting easy loans, good business credit score helps in your business in the following cases:
- Easy access to credit
- Better trade-credit
- Negotiating terms on business credit
- Protects your personal finances
- Better Business Credit Card Rewards
Do you want to gain all these benefits? Here are few steps that will lead you to them
4 Steps to Maintain a Good Business Credit Score
1. Pay bills within time
Positive payment history boosts your business credibility. You can build a healthy repayment schedule by having an automated bill payment system integrated with your business credit card.
2. Stay away from Debt
Similar to individual credit score, staying away from heavy debts will greatly improve the business credit score. Ensure you clear your debts before you apply for additional working capital. The greater number of loans taken and unpaid on time will lead to sharp decline in the overall score.
3. Short Term Loan vs Long Term Loans
SME owners are often confused whether to apply for short-term business credit or long-term loans. However, it is advisable to refer to your business needs before applying for one. Check your repayment capability and opt for a better alternative.
4. Reduce Credit Utilization
Although there’s no official limit on credit usage, it is recommended to keep credit utilization to 30% as a higher usage can result in business failure. To ensure your credit utilization rate is maintained, reduce the new expenses made on the business credit card and pay the existing balances.
founderscard is a business credit card designed for the SME owners of India. Get the best-in-class credit limit, automate bill payments, and get up to 51 days of interest-free credit period. Manage your business smoothly like never before by getting your founderscard. Contact us today!