At the beginning of the business, the companies need loans to fulfill the need of initial stages. Therefore, maintaining a good FICO score becomes a necessity otherwise, it becomes difficult for small businesses to apply for a loan and get it. As per FICO, nearly 110 million people will need to improve their credit score and make adjustments of around 20 points down or up. No matter if the score increases or decreases, it still depends on the financial behavior. It is essential to work on it for improvisation and better scoring. Therefore we have shared some tips that will SMB’s to improve their new score:
Payment History
- Paying your bill on time is what you must ensure; even one missing payment can weaken and deteriorate your credit score.
- It is vital to get it done as soon as possible if the payments have been missed because delays will worsen the score drastically.
- You can set up payment reminders to make sure that you pay the bills timely. If your bank has the feature of giving you reminders of payment, then it is excellent, but if not, then you can set reminders on your phone.
- The guaranteed way not to miss any payment is by opting for a feature where the bank automatically debits the amount on the fixed payment date.
- With money troubles, a reputed credit counseling service can help.
Use of Credit Card
- It becomes very important to keep a check on the utilization of credit card accounts because having too many accounts will lead to a poor credit utilization rate for those who are seeking loans.
- If you pay the existing debt on time, that will help in improving the credit score drastically and make sure you go through the Five Elements of Fico so that you can know more about improving your FICO score.
- Because issuers of credit cards will report at the same time to the bureaus when the statements are sent, thus maintaining a high utilization rate can be difficult. But by paying your dues beforehand can help in securing the rate.
Defamatory Marks
- If, after going through the cash flow on the monthly level, firstly,
- you pay the monthly bills like water, electricity, food, etc., then it will let you know the exact amount of how much money is in your pocket to play with.
- It’s always a good idea to put money on debt-saving, no matter where you have earned it, like selling stuff online, working extra to bring more cash to home, or utilizing the credit card cash rewards.
- You will get a triumphant feeling when you arrange debt from smallest to largest. However, it may be an excellent step to pay less interest bypassing the time, to manage debts so that those having higher interest rates are on the priority list, and to pay less balance on the other debts.
These are a few tips that can be beneficial for you when trying to improve your FICO score but also try to
Conclusion
For small businesses applying for loans can be a big task and a necessity, too, so ensure you go read the tips mentioned above.
