Increase Your Business Credit Score (MNP 3 Minute Debt Break)

2021-10-05

schedule3 minute read

Today, many Canadian businesses have to work twice as hard to keep up with a competitive landscape in a weakened economy. If you really want to stay ahead of the curve and leave the doors open for as much opportunity as possible, it's crucial to be fully informed of your credit score and what you can do to further improve it.

Your credit score helps lenders decide on your worthiness of credit, which can make all the difference should your business find itself in a pinch for any reason. It's crucial to be proactive and take steps to boost your business credit score as much as possible.

There’s a widespread myth that asking to see your credit report somehow affects your score. It doesn’t, so feel free to request your report and study it carefully, paying particular attention to the negatives. You may find a few errors that can easily be corrected or some outdated information that can be removed.

The best way to boost your business credit score is to start paying down your debts. In particular, try to reduce the balance on your credit cards as this is seen as a particularly risky form of lending. If your business credit score is good already, request an increase in your borrowing limits. This may sound completely counter-productive, but actually makes perfect sense. Requesting a new credit line can actually enhance your score as it lowers the percentage of your available business credit in use. Similarly, if you have a positive history with a business credit card, do not close the account even if you no longer require it.

Another basic way to increase your business credit score is to make your payments on time. Regularly missing repayments on your outstanding business credit is a sure sign of a business in trouble. It’s a huge red flag for any lender, and is almost guaranteed to make securing additional funding difficult.

Also, be sure to file your paperwork on time. If you operate a limited company, the documents you file will contribute to your business credit rating. Make sure you file regularly and update any changes, as many lenders will not do business with companies that have incorporated but not filed any accounts.

These are just some of the tips you can use to increase your business’ credit score. MNP Debt understands it hasn't been an easy go for Canadian businesses lately. If your business has already begun to falter and you're looking for advice as to what your best course of action should be, contact MNP Debt on what debt solutions are available to help you.

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