5 Ways To Boost Your Business Credit Score So You Can Get A Hard Money Loan
A hard money loan is a loan that is secured by real estate and provided to a borrower. It is typically used by investors who need short-term financing but have difficulty getting traditional financing from a bank due to the increased risks associated with their project. However, sometimes it is still important for borrowers to have a decent business credit score in order to secure hard money loans. If you're worried you won't get accepted by a hard money lender, here are five ways to boost your business credit score.
1) Monitor Your Credit Reports
It's wise to keep an eye on your credit reports if you're thinking about applying for hard money loans soon. Even if you aren't, you should regularly check and monitor your credit reports for any inaccuracies or errors that may be negatively impacting your score. You should also keep an eye out for any suspicious activity or changes in your accounts.
2. Pay Bills on Time
One of the most important factors in determining your credit score is whether or not you pay your bills on time. Make sure to stay on top of all your bills and payments, as any late payments can take a toll on your credit score. If you do pay a bill late, talk to the lender about removing the late payment from your account. Some lenders are willing to do this if you usually pay on time.
3. Keep Balances Low
Another factor that affects your business credit score is how much debt you have compared to your available credit. Keeping your balances low, and paying off any existing debts as quickly as you can, will likely help improve your score.
4. Separate Your Personal and Business Credit
It's important to keep your personal and business finances separate, which means having a separate credit card or loan for each entity. Doing so will help ensure that your business credit score is solely based on how you manage the business's finances, which can help boost your chances of getting a hard money loan.
5. Don't Close Unused Accounts
Having unused but open accounts can be beneficial to your credit score, as having more available credit looks good to lenders. So when possible, try to keep all of your existing accounts open, and make sure to stay on top of any payments.
Following these steps should help you boost your business credit score so that you can qualify for a hard money loan. A strong business credit score will demonstrate to potential lenders that you are capable and competent when it comes to managing finances, and could make all the difference when you're trying to secure financing for your project. Take advantage of these five tips and get ready to submit that loan application.