Funding a small business in never easy. You can get a business loan, but in case something goes wrong and you start struggling to repay your debt, your bad credit can hold your business back. This means that you have negative listings attached to your credit report, making lending institutions less likely to approve your requests for new loans. In addition, businesses with bad credit also tend to be labelled as untrustworthy. Therefore, it’s always a good idea to do everything you can in order to clean your credit record. Listed below are 5 tips that are guaranteed to help. Image source: Flickr
Check Your Credit Report
Taking a closer look at your credit report is a great way to start dealing with bad business credit. This way, you will be able to figure out what’s causing your bad credit and choose the right way for improving. Formulating the right plan is a key step in tackling bad credit. You can request a free copy of the credit report once per year and every time your loan request is declined. Paying for a couple of additional copies throughout the year is never a bad idea, especially if you want to keep track of your progress.
Turn To Experts
Negative listings are something that can easily cause your business to fail. Luckily, they can be completely removed from your credit record. Today there are experts who can help you do just that, and make financing your business much easier. And there’s no need to worry even if you think you cannot afford hiring experts to do this for you. Companies like Clean Credit give you a chance to pay the fee only after your negative listings have been successfully removed from your record.
Stay Away From Payday Loans
Many business owners tend to turn to payday loans in order to get enough money to pay off their current debts. Still, this is something you should avoid because with the loans like this, you usually end up paying much more than you have borrowed. In fact, advertising payday loans has been forbidden in many countries all around the world. No matter how tempting a payday loan may seem, keep in mind that there are plenty of better options available out there.
Find A “Credit Booster”
Another way you can improve your bad credit is to partner up with a business that has great credit. They can co-sign you a loan you’re going to use to repay your debts and remove negative listings from your record. Of course, in this case, if you default on your loan, it will be your partner who will have to repay it. Just bear in mind that the business you partner up with will probably want to have a say in how your business is being run, in order to make sure they don’t end up stuck with your loan.
Use Your Business Assets as Collateral
Using your business assets as collateral is a great way to offset your bad credit. When you offer collateral, lending organizations will be more likely to accept your loan request, as it leaves them with something to sell even if you default on the loan. Furthermore, with your valuable assets at stake, you will have an added incentive to pay off the loan on time which always has a positive effect on the credit score of your business.
By following all of these tips, you’ll be able to tackle your bad credit and start working towards cleaning your credit record completely. Just make sure you focus on paying off all of your loans, even if that means missing out on some luxuries you and your employees have got accustomed to.
Dan Radak is a marketing professional with eleven years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with companies in the field of digital marketing, collaborating w/ e-commerce companies.
I hope you enjoyed this article about advice on how to deal with bad business credit without crippling your business.
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