Your small business is always changing to improve and adapt. You might want to change the name of your business, but doing that can be challenging. Our content partner Nav explains how a name change affects your business credit and how to protect your good standing.

Your small business is always changing to improve and adapt. You might want to change the name of your business, but doing that can be challenging. Our content partner Nav.com explains how a name change affects your business credit and how to protect your good standing.

 

Changing your business name can be a lot of work, and, quite frankly, a hassle. But can it also put your business’s credit history at risk?

Kimberly Wilson is about to find out. In 2006, she started First Step Therapy, a counseling and training business, and grew it into multiple locations. A few years ago she took a hiatus from that business to earn her doctorate degree, and now she’s ready to relaunch her business. She has chosen a new name that reflects her new vision for the company. It will be called First Step International Consulting & Counseling Services and will offer training for individuals, businesses, and professionals.

However, she’s worried about what will happen to her business credit when her name changes. “I am concerned that if I retain the same federal tax ID but change the name, I will lose my business credit rating,” she wrote in an email. “How do I prevent that from happening?”

Wilson built a positive business credit history in her first business. She established business credit by using trade credit—purchasing things she needed for her business, such as supplies or printing—with payment terms of net 30 or net 60. She paid those bills on time, and as her business credit scores improved, she was able to access even more credit. Eventually, she used business credit to finance computers and other equipment.

Older is Better

Wilson is right to be concerned about keeping her credit history, since age is a factor that often affects business credit scores. Scoring models often evaluate age in a few different ways:

  • Age of the business—How long has the business been open?
  • Time in file—When was the first account opened?
  • Age of accounts—What is the average age of all accounts?

Since small businesses often fail in their first few years, businesses with older credit histories benefit from well-established credit histories.

The good news is that Wilson doesn’t have to sacrifice her business credit history when she changes her business name. But she’s smart to be proactive, because by doing so she is more likely to ensure her complete credit file will follow her business.

Steps to Take

If you find yourself in a similar situation as Kimberly Wilson, here are several steps you can do to help the process move smoothly:

Submit a name change to the Internal Revenue Service if necessary. You’ll find instructions and guidance on the IRS website.

Update your name with state and local agencies as required. If you have registered your business with your state Department of Corporations, for example, and/or you must have a local business license, you may need to update your business name with either or both.

Notify your creditors. Let your creditors know about your name change so when they report your account in the future, it will be reported under your new business name. Hopefully this will also help associate your old credit history with your new business, although that is not guaranteed. Do the same with companies through which you process payments, such as credit card processors, your bank or credit union, etc.

Notify the credit bureaus, as necessary. We asked the major commercial credit agencies to clarify their policies and procedures regarding a business name change, and here are their responses:

  • Dun & Bradstreet does not require business owners to notify them of a name change unless it involves a change of ownership. If it does, visit Dun & Bradstreet’s free company update page here.
  • Experian recommends small business owners visit BusinessCreditFacts.com to update their reports.
  • Equifax does not require a business owner to report a name change. As long as the business uses the same credit accounts and does not use a different tax ID number, the reporting members will report the credit history using the new name. The business credit report will also reflect the previous name (similar to how a former name is reflected on an individual’s credit file).
  • LexisNexis does not require a business owner to report a name change.

“Information on small businesses is in constant flux as they change or add locations, evolve into new entity types (e.g., from sole proprietor to LLC), change leadership, grow their assets, and more,” says Ben Cutler, Senior Director of Small Business Risk with LexisNexis. “It’s even common for a small business to change its DBA and/or its name. But these activities leave ‘footprints’ in the data ecosystem, and LexisNexis Risk Solutions relies on its Big Data technology and sophisticated, statistically based record linkage models to uncover and combine these footprints across billions of data records.”

Check and monitor your business credit reports. Review your business credit reports before your name change to see which accounts report, then continue to monitor them afterward to see whether those accounts are reported under your new name. If not, you can contact your creditors and ask them to make sure your accounts continue to be reported under your new business name.

There are many more steps you need to take to successfully navigate a business name change, but with the right planning, you should be able to keep your credit history intact.

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

The way credit agencies report public records is changing this summer. Our content partner Nav explains what is changing and how it might help your credit score!

The way credit agencies report public records is changing this summer. Our content partner Nav.com explains what is changing and how it might help your credit score!

 

A slew of changes to how credit reporting agencies will handle public records could help millions of Americans improve their credit scores this summer.

For decades, the major credit bureaus — Experian, Equifax and TransUnion — have included public records like parking tickets and fines in consumer credit reports. But, as a result of a settlement with the New York Attorney General in 2015, the bureaus announced plans to update and modify their data collection and dispute processes to improve credit report accuracy.

Changes under the National Consumer Assistance Plan actually began rolling out in September 2015, with another round of changes taking effect September 2016 and the final round occurring on July 1, 2017. This final group of reforms mainly pertains to public records like tax liens and civil judgments. It includes two major policy shifts:

  1. Public records will now be required to list the name, address, Social Security number and/or date of birth of the consumer.
  2. The records will need to be updated every 90 days in order to remain on consumers’ credit reports.

The Consumer Data Industry Association, a trade group representing the major credit bureaus and other data companies, estimates that this change could result in the removal of 96% of civil judgments and 50% of tax liens currently appearing on consumer credit reports due to insufficient personal identifying information (PII) under the new standards. Bankruptcy records will not be impacted by the data standard changes as they already comply with these policies.

This isn’t the only consumer-friendly credit reporting shift that’s happened recently, though. The July 1 shift has been planned for a while, but, as we first reported on Nav, consumers got an additional boost late last year from a handful of major debt collection companies who decided to stop reporting on paid collection accounts after 2 years, or to not report collection accounts that were paid in full or on a payment plan if the consumer started paying within 3 months of the initial collection notice. Though not all collection agencies are following this policy, it’s a major shift for one of the top credit report issues — unpaid collection accounts — and one source told Nav that the decision has already removed more than a million derogatory accounts.

The impact of the CDIA changes in July compounded with the recent debt collection shift means millions of Americans could see a credit score lift in 2017. The impact goes beyond just consumer credit scores as well — while businesses have their own credit scores, nearly half of small business owners use their personal credit scores to secure business financing (many business credit cards, for example, require a personal credit score to get approved). So a major lift to a personal score could make a big impact on small business owners looking to secure business financing in the future as well as under the July changes. (You can check your personal and business credit scores for free on Nav.)

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Getting a small business loan is more than collecting the right documents and providing financial information to your lender. Our content partner Nav explains five actions you should stop doing that will negatively impact your ability to get a loan.

Getting a small business loan is more than collecting the right documents and providing financial information to your lender. Our content partner Nav.com explains five actions you should stop doing that will negatively impact your ability to get a loan.

 

Lenders are going to looking at a number of factors to determine your eligibility for a loan, including your personal and business credit scores, your business banking information, personal and business tax returns, P&L statement and more.

If this seems overly complicated, never fear. While you can’t make all of these factors perfect overnight, you can exercise control over some, which will greatly improve your chances of getting the financing you need to make your business strong. Let’s take a look at five things you should definitely avoid before applying for a loan.

Missing a Payment

Don’t miss a payment on your personal or business credit cards, vendor accounts or any accounts that report to personal or business credit reporting agencies.

Payment history is the most important factor in both personal and business credit scores. Although it varies by score, payment history accounts for about 35% of your personal credit scores and 50% of your business credit scores. Just one late payment can bring down your scores significantly.

Most lenders are going to look at least one, if not both, credit scores. Most financing types will require you to meet a minimum credit score requirement — the SBA’s most popular loan program — the Advantage loan program, for example, has a minimum FICO SBSS score of 140 or above.

Making Large Purchases on Your Credit Cards

Large purchases can also affect your credit scores if you’re not carefully paying them off. This applies to purchases made on both your personal and business credit cards. Large purchases run up your credit utilization, which is an important factor influencing both personal and business credit scores.

Here’s a tip if you need to make large purchases on your credit cards: find out when your card provider reports to credit reporting agencies, and pay off your balance before that date so your high credit card balance is not reflected on your report. Often, this is the date your statement is issued.

Letting Your Business Bank Account Dip Below $1,000

Lenders like to see that you have enough free cash flow available to meet current debt obligations. A low balance (generally below $1,000) is a sign to lenders that maybe your business isn’t in the best shape financially.

Obviously, negative balances are even more of a red flag. Negative balances tell a lender that your business doesn’t have enough money in the bank to cover loan payments.

Here’s a tip if your business account balance is low: transfer a cushion of cash into your account, or secure a line of credit from your bank so your account doesn’t dip too low during cash-flow emergencies.

Applying For Certain Types of Loans

A Merchant Cash Advance (MCA) has been described as a “payday loan” for small businesses. How it works is an MCA provider pays a one-time lump sum, often instantly or the same day as the application, to a merchant in exchange for a percentage of future credit or debit card sales.

Fast money comes at a price, however, and MCAs usually charge high interest rates of 50% or more. If a business has outstanding MCAs it’s a sign to lenders of financial volatility, similar to the way a personal lender might view you as an individual if you’ve take out multiple payday loans.

Here’s a tip to avoid taking out an MCA: Consider applying for a business credit card before any potential cash emergency so you’re prepared should that time come.

Not Checking Your Business Credit

You’ll want to check your business credit scores and reports before you apply for any business financing so you know where you stand. If your scores are bad, and making a couple of small moves like paying off a credit card or asking for a credit limit increase will improve them, you could score better interest rates and terms. (You can check your personal and business credit scores for free on Nav.com.)

Also, checking your credit report ensures the data is accurate and up to date. Some negative items may still be on your report causing headaches despite the fact they should have dropped off. UCC filings are a good example of this.

When you take on financing that requires collateral, the lender places a legal document called a UCC filing on your business credit file, which signals to other creditors that they have a legal right to your collateral specified in the filing if you fail to pay your bills to the lender.

If you already have a loan that required collateral and are looking for another loan, you’ll find that many lenders are unwilling to lend to your business if they are second in line to the creditor that placed the initial UCC filing. UCC filings can last for 5 years (or more if the lender files a continuation of the UCC).

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Our lending experts are here to answer your toughest questions about small business financing. Gerardo Campos, a loan consultant here at Opportunity Fund, shares his insights on lending with this Q&A about applying for a loan. Continue reading to find out what to expect when applying for loans and how you can be better prepared.

Our lending experts are here to answer your toughest questions about small business financing. Gerardo Campos, a loan consultant here at Opportunity Fund, shares his insights on lending with this Q&A about applying for a loan. Continue reading to find out what to expect when applying for loans and how you can be better prepared.

 

Q: What can borrowers expect in the application process?

A: After completing a loan application form, a loan consultant will pull your personal credit and call you with any questions. Sometimes additional documentation may be required to be sent in after your application is reviewed.

Q: How long should the process take from start to finish?

A: It depends on the lending institution and the amount of money requested, but it should take between two and thirty days. Here at Opportunity Fund, you can get funds in as few as two to five business days.

Q: How will credit scores impact the application process?

A: Your credit score is not the sole determining factor in whether or not you get a loan, but some lenders are stricter about minimum scores than others. Credit scores are indicators of creditworthiness and past payment history. When we pull your credit score, it will have a small impact on your credit score because it indicates you are looking for a loan.

Q: Why is time in business important?

A: As a responsible lender, we require that you’ve been in business for a minimum of one year because we want to make sure you already know how to run a business. We also want to make sure there is a profitable margin large enough to repay your loan.

Q: What are options for making payments?

A: The easiest way to make payments is to set up automatic payments. You can have it taken out weekly, bi-weekly, or monthly. Other options for paying include at your bank, at a 7-11, by mailing in a check or money order, or over the phone if your bank account information was provided at the time your loan was approved.

Q: What happens if a borrower has trouble repaying their loan?

A: Always talk to your lender if you are having problems repaying your loan. We can always work something out if you have proof of hardship such as a death in the family, medical problem, or natural disaster.

Q: What documents should a borrower have ready before applying for a loan?

A: Take a look at this handy, easy-to-use checklist for all the documents you need when applying for a loan.

Download the PDF here:

Loan Preparation Checklist

 

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

You can have too much of a good thing. Our content partner Nav will help you figure out if you have too many business credit cards and how they could be negatively affecting your business.

You can have too much of a good thing. Our content partner Nav.com will help you figure out if you have too many business credit cards and how they could be negatively affecting your business.

 

A business credit card can be an incredibly powerful financial instrument, and some business owners wonder how they can best leverage these tools. One way to get the most value from your business credit cards is to open several different accounts for a larger line of credit or to receive the rewards and benefits offered by different cards.

But can you have too much of a good thing? And how will having multiple business credit cards affect your credit history and credit score when you apply for a loan?

If you’re wondering if you have too many credit cards for your business, ask yourself the following questions.

Am I having trouble managing my business credit card accounts? When using either business or personal credit cards, the most important consideration is paying your bills on time. When you make late payments, you will incur costly charges at the penalty interest rate, as well as expensive late fees. And if you miss multiple payments, your personal credit history will suffer. If you are unable to manage all of your business credit cards responsibly, then you definitely have too many.

Am I being surprised when I receive the statements? If you receive credit card statements with larger balances than you expected, then you might have too many small business credit cards. Being surprised each month is a symptom of not keeping close tabs on your small business credit card spending, and that of your employees. One way to mitigate this problem is to configure alerts that notify you when your spending reaches a certain level. But even if you configure alerts on all of your accounts, it will be easier to manage your spending with fewer small business cards.

Am I getting value from all the credit card annual fees that I am paying? Even when you are able to manage all of your credit card accounts successfully, you might still have too many cards if you are paying unnecessary annual fees. For example, a premium travel rewards card for small business will typically offer airport business lounge access for a $450 annual fee. But if you haven’t been regularly using the lounge access, then there’s no reason to continue to pay the fee to keep the account open, especially if you have other cards with smaller annual fees. You shouldn’t be paying an annual fee for many small business credit cards unless you are receiving value from each one of them.

Business Credit Cards and Your Credit Score

When you are thinking about how many small business credit cards you need, an important consideration is how your cards will affect your credit history and credit score. Each credit card you have, including both personal and some small business cards, adds to your personal credit history (find out which business credit cards report to personal credit here). As long as you continue to make on-time payments, each account will benefit your credit history and credit score, but with diminishing returns as the number of accounts increases.

Having multiple small business credit cards will also increase the total amount of credit available to you. And as your total credit limit is extended, it will reduce your debt-to-credit ratio for a given amount of debt. Having a lower debt-to-credit ratio is a significant factor in your credit score.

Holding several small business credit cards will offer you a strong credit history and make it easier to have a low debt-to-credit ratio, but there are other things to consider, especially when applying for a home mortgage or another major loan. After applying for a major loan, you will want to abstain from applying for any new lines of credit until the loan closes, including small business credit cards. If you’re considering applying for a major loan in the near future, it can also help your credit score to pay off as many accounts as possible.

There can be advantages to having many business credit card accounts open and in good standing. These include the ability to earn rewards and receive cardholder benefits, while increasing your personal credit history. But when you have trouble managing all of your accounts, or you are paying too much in annual fees, then it’s a good indication that you have too many small business credit cards.

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Finding financing for your small business could hurt your credit score. Our content partner Nav shares the trick to avoiding this pitfall – soft credit inquiries.

Finding financing for your small business could hurt your credit score. Our content partner Nav.com shares the trick to avoiding this pitfall – soft credit inquiries.

A high credit score improves your chances of getting approved for a business loan, but credit inquiries during your loan shopping process could lower your scores – how does that work?! The situation sounds like a catch-22, but you can minimize the negative credit impact of your search with a few strategies.

Understanding Inquiries

Your credit score reflects multiple factors, such as your credit utilization, age, account diversity and ratio of revolving credit lines. Credit inquiries can impact your credit score as well, although not every inquiry factors into the calculations.

If a lender says its inquiry won’t impact your credit score, it pulls a soft inquiry. The lender uses a soft inquiry to access information from your credit report to pre-qualify you for loan products. Most lenders specifically say “pre-qualification won’t impact your credit score”, so watch out for pre-qualification processes without this line. Lending Club is a good example of a lender who makes it clear that their pre-qualification doesn’t affect your credit, with the phrase “won’t hurt your credit score” right on the page. Perhaps an obvious statement, but definitely one you should be happy to see!

Lenders use hard inquiries when evaluating your credit file to process a credit or loan application. These inquiries impact your credit for one year and remain on your report for two. When other lenders see hard inquiries on your report, they get an idea of how many credit applications you made within this time span. You want to minimize hard inquiries on your report to lessen the credit impact of your loan shopping. Here’s where submitting a bunch of applications to hopefully have one accepted can work against you.

Research your options

One way to minimize your hard inquiries is by researching different funding types. Not all business loan products are created equal, so looking into the difference between funding types is an essential step in the funding process. Use Nav to break down the differences between loan types, see which options you will likely qualify for, and which ones work best for your business.

Narrowing the field

Once you know which type of business loan product interests you, it’s time to narrow down the playing field. Sure, you could apply to every potential loan offer you come across and hope to get a hit, but that’s like dating everyone who ever asked you out. You put in a lot of time, and end up worse for wear because of it. By being selective with your loan and credit applications, you generate hard inquiries only from lenders who will likely approve you.

Once you’ve narrowed down the field, consider gathering all the necessary documentation ahead of time and setting aside a block of time devoted to sending in your applications. A general rule of thumb is that you should limit your shopping to a two week (14 day) period. If credit bureaus see multiple hard credit inquiries of the same nature in a short period of time, they may be able to conclude that you are searching for financing and will count each application as just one inquiry. This is a great way to tilt the odds away from a damaged credit score.

There are so many business funding offers out there, it’s hard to figure out where to start on your own. Nav’s Marketplace gives you a way to narrow your selections down based on your personal and business credit score, industry, cash flow, and other aspects of your business. You can filter lenders based on the most important funding factors for you, such as funding speed, loan amount, business credit building, APR, and other factors. Our tool also explains what each lender needs for the application process, as well as what they look for in the approval process.

Navigating the business credit landscape without hurting your business credit scores is tricky, but not impossible. By understanding how inquiries work, what your funding options are, and the best business loan options for your situation, you keep unnecessary hard inquiries at bay.

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. Last year, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

You already know that good credit is vital for getting the loan your small business needs. Our content partner Nav shares four easy ways to improve your credit score.

You already know that good credit is vital for getting the loan your small business needs. Our content partner Nav.com  shares four easy ways to improve your credit score.

Small business owners have a lot of numbers to think about when managing their finances. But one series of numbers that often gets ignored is their business credit scores. Just as individuals earn a numerical rating to help lenders determine their credit-worthiness, businesses are also given a score based on their credit history, and that score can impact their ability to get financing, government contracts, trade credit accounts and more.

Business credit scores are created by agencies like Dun & Bradstreet, Experian and Equifax, all of which use a score that ranks a business from 0 to 100, with 100 as a perfect score. You should aim to keep your business credit scores above 75.

In addition to these bureaus, FICO also has a score that rates small businesses: the FICO SBSS score. It ranges from 0 to 300, the higher the score, the better. The SBA uses FICO’s SBSS model to pre-screen it’s most popular loan applications. If your score falls below 140 then you likely won’t qualify for these attractive (loan interest rate) loans. And banks usually require your FICO SBSS score be even higher, in the 160 range.

With all the different bureaus and types of scores, it can be confusing. The good news is that following a few simple steps can ensure your business has a strong credit profile regardless of the bureau or model being used to judge it.

Establish Credit

Many small business owners might not see a need to establish business credit when they are starting out. Often, when working on a small scale, you can bankroll the company on your personal credit. But even if you don’t see an immediate need for business credit, one might arise down the road as the business grows and expands. It’s better to dig your well before you’re thirsty, right? Not establishing a business credit profile might disqualify you from financing when it’s needed.

Since business credit scores are strongly based on history, you should open a few credit accounts, like business credit cards, to start to build a credit history. Even if the business does not need this financing, it will pay off to use it minimally and show your business is responsible managing credit.

Pay Early

You might think that paying all of your bills on time is enough to earn you perfect business credit reports. With your personal credit score, this might be true. But with your business credit score, on time is not enough. The Dun & Bradstreet Paydex score, for example, is completely based on the timeliness of your business’ payments to its vendors, suppliers and creditors. Paying on time will earn you a Paydex score of 80. The only way to earn a perfect 100 is to make your payments 30 days before they are due.

Keep Debt Low

A big factor impacting your business credit score is your debt-to-equity ratio. This measures your business’ financial leverage in relation to the amount it is currently using. Credit utilization is another important metric, which looks at your available credit in relation to your debt. A high ratio will result in a low credit score. Small business owners should aim to keep credit utilization below 30 percent. A good tip to help manage this is to make several small payments during a billing period rather than waiting until the end to pay off the debt in full.

Check For Mistakes

Mistakes are more common on business credit reports than on personal reports. A Wall Street Journal survey showed that 25 percent of people who checked found business credit report errors that lowered their score. The main reason errors are more common is because business credit data is much more fragmented, so it’s easier for information to get crossed up.

This is another reason why it’s important for you to regularly monitor your reports to ensure there are no mistakes.

Nav offers truly free business credit reports and monitoring on our website. We also have a free tool (CreditSweeper) that helps you spot and dispute any mistakes.

By doing these simple things, you should be able to maintain a healthy business credit score and ensure your business is poised to take advantage of any growth opportunity.

 

This article originally appeared on Nav.com and was re-purposed with their permission.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.


Opportunity Fund is California’s largest and fastest-growing nonprofit lender to small businesses. In FY16, we made $60M in loans to help more than 2,200 small business owners invest in their businesses.  Opportunity Fund invests in small business owners who do not have access to traditional financing. As a founding member and signatory to the Borrower’s Bill of Rights, we believe in the important role small businesses play in our community and the economy, and we aim to help owners financially succeed.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

Opportunity Fund. Working Capital for Working People. opportunityfund.org