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Tata Capital > Blog > Loan for Business > Tips and Tricks to Build Business Credit

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Tips and Tricks to Build Business Credit

Tips and Tricks to Build Business Credit

Are you a new business owner considering a business loan to satisfy your operational costs, purchase inventory or hire more staff? Well, then the first thing you should focus on is your business credit. Why? Because it is a powerful financial tool that can help prove your business’s reliability.

If you have borrowed a loan before, you’ll know how your personal credit plays a significant role in the loan’s approval. Similarly, building your company’s business credit is equally important. It can help you qualify for loans at favourable terms and expand your enterprise

Read on to learn how you can build business credit fast.

What is business credit?

Before we dive into the tips and tricks, let’s find out what business credit actually is. Business credit reflects your business’s financial history and how you have handled credit in the past. It includes credit cards, loans, trade lines from your suppliers, lines of credit, and more.

Therefore, just like your credit score, your business credit also conveys whether your business is fit for borrowing. Ergo, you must improve your payment and expense history, along with your repayment pattern, to build business credit.

How to boost business credit

• Register your business

First things first, you must register. This had two crucial benefits. Firstly, it will legitimise your business. And second, it will help you separate your personal and business finances and expenses. Thus, you can build a business credit profile that is not affected by your personal credit.

• Pay your bills on time

If you want to build business credit in 30 days, make sure to never miss a payment to your vendors and lenders. Always settle your business credit card debt and pay all bills on time to maintain healthy business credit.

Additional Read: Top 7 Ways to Build Business Credit

• Create a separate entity for your business

Registering your business is just the beginning. Next up, you must officially list your business as an independent entity. To achieve this, ensure that your business has a separate phone number, email address, and most importantly, an online presence to put it on the map!

• Open a business bank account

To build business credit, it’s imperative that your personal and business finances stay separate. Opening a current account for your business can help you do that. What’s more, getting a business credit card linked to your current account is a sure-shot way to building business credit faster.

• Get professional assistance

Lastly, you can subscribe to the services of companies that help build business credit. They help review your company’s credit profile and suggest strategies to improve credit ratings. Furthermore, they also help you protect your company’s credit information and prevent identity theft.

Additional Read: Key Benefits of having a good business credit score

Your turn

Healthy business credit is one of the most significant assets of your company that will ensure a decent reputation in the market. Plus, it can help you leverage any financial tool to revamp or expand your business.

With sufficient business credit, you can easily apply for business finance with Tata Capital. We provide customised business loan to suit your business aspirations and flexible repayment options to make the process effortless.

Visit our website to get a precise estimate of your EMI burden with our business loan EMI calculator.

Apply Now
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