Securing debt financing or an unsecured business loan can be particularly difficult if you have a low credit score.
To make yourself more attractive to potential lenders, then you need to consider how to go about doing the ‘right thing’, potentially ‘pay your dues’ for a while, and then reapply for that loan you need. Below are a selection of excellent tips and techniques that will help you improve your credit rating – some of these are so simple you’d wonder why you didn’t think of them earlier!
- Look at your credit file. Get a copy from your credit agency and find out your credit score.
- Have an active credit card account and sign up for a small credit card, if possible. Make your payments on time and start setting a good positive tone.
- Fix up other people’s mistakes – your credit file may have a default, court writ or judgement listed on it by mistake.
- Pay your bills on time by keeping track of them, setting up a calendar, and even monthly direct debits if possible.
- Don’t ask for too much. Becoming a credit junkie with too many failed applications may lead to a loss of a lot of credit score points.
- Avoid negative listings at all costs. Having a negative listing against your name can have a terrible impact on your credit score, and stay there for five years. Writs, judgements, bankruptcies, and clear outs can be listed for up to 7 years. You’ll find that credit providers will avoid you like the plague with a negative listing.