Tips for maintaining your business credit

In today's tough economy, it's more important than ever for a business owner to maintain an excellent credit history. With your vendors scrutinising payment records before extending goods and services, and potential lenders thoroughly examining your creditworthiness, you will want to make sure that your record is spotless and your business can prove its solvency.

How can you show vendors and lenders that they can depend on your word? Here are five tips for getting your business credit history established (or cleaned up, as the case may be) and for demonstrating your reliability.

Check your personal credit history

First, make sure your own house is in order by getting copies of your personal credit report from a credit reporting agency. You are legally entitled to a free copy from Dun & Bradstreet's Personal Credit Report  website. In doing so you are taking the first step in making sure your credit standing is accurate and in good health, which is particularly important given the high debt levels of many households at present.

Obtain your business credit report

Your business credit record is the next report to examine. You can do this through D&B Express  or Credit Gate, both of which allow you to access your business's credit report as well as the credit reports of other companies- which could be your customers or competitors.

Obtaining a good idea of the risk profile of your company will put you in a good position when applying for credit as you will be able to take steps to rectify any inconsistencies or errors on your credit record.

Monitor and correct your credit reports

Once you have all of the information collected, thoroughly examine both your personal and your business reports for errors or outdated information. You may even want to sign up for a reporting service that will alert you to potential red flags immediately. If you see bad information or evidence of identity theft, contact the credit reporting agency for next steps to get your history cleared.

On the other hand, if you've had actual credit troubles in the past, make sure that you're working to pay down debt, avoiding bumping up against your credit limits if possible, and making your payments in plenty of time

Get serious about security

One of the best ways to keep your personal and business credit history clear is to avoid identity theft and fraud in the first place.

Be sure that you're running background checks on employees, shredding or locking up sensitive documents, and using technology safely. Learn best practices around online banking security (a few important points are to keep passwords private, never follow links from unsolicited emails, and maintain a secure network environment). And of course, you should have anti-virus software installed on any computer you're using.

Take advantage of business credit cards

Business credit cards, used appropriately, can do two things to help your credit. First, they give you more cash flow by essentially providing you with a short-term loan. Second, they represent an important tool for establishing a credit history. If you make your payments on time and keep balances under the maximum, your credit score will improve.

Some business credit cards can even help you track expenses and that earn rewards or cash back, and you can simplify purchasing by issuing restricted cards to employees. Read more about business credit cards here.

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