If your business has poor credit, it can put a severe damper on the business’s ability to obtain financing. The good news is that with the strategies outlined in this article, you can improve your business’s credit rating.

Obtain a Business Credit Report

It will be easier to start repairing poor credit if you know where your business stands, and the best way to obtain that knowledge is with a business credit report. A business credit report can show you the factors that are damaging your business’s credit score. Additionally, if there are errors in the report that are hurting the score, you can take steps to address and correct those mistakes.

Cut Down on Credit Usage

As pointed out by Marco Carbajo at The Balance Small Business, when you’re looking to improve your business’s poor credit, it’s essential to stop the bleeding by cutting down on your credit usage. While it’s important to use some credit wisely, using too much will both bog your business down in interest payments and damage your credit utilization ratio. (The credit utilization ratio is the amount of credit your business is using versus the maximum amount it has available.)

Pay On Time and Reduce Outstanding Balances

Paying on time and reducing your outstanding balances are two methods for improving poor credit that goes hand-in-hand. Making payments late is a surefire way to damage your credit score; however, if you string together a long period of on-time payments, your score will likely rise. Meanwhile, those on-time payments can work toward cutting down the amount that your business owes lenders. That, in turn, will improve your credit utilization ratio—as long as you avoid taking on new debt elsewhere.

Want more tips that will help your business thrive? Be sure to take a look at Elevation Financial’s other blog posts.