When looking to obtain a small business loan with bad credit in Canada, the first thing you should try to do is improving your credit score. Here are 7 steps to improving your credit score, fast.
Your score tells you a lot about where you currently stand and the steps you need to take going forward. Once aware of your score, you know what is affecting it both positively and negatively and you can come to appreciate how to go about navigating it.
One of the easiest and most recognizable ways to improve your score. Paying your bills is the best thing a small business can do to appear, and become, a reliable source of payment. Even if everything else is positive, late payments make you, and your business, a credit risk.
- Reduce the credit utilization ratio
The credit utilization ratio is the amount of credit used up with respect to how much is available. This is one of the first things lenders look at when giving you a score. Ideally, you should try to keep the ratio within 15%.
- Establish credit accounts with suppliers
If you work with certain suppliers repeatedly with a good payment relationship, establish a credit account with them to increase the number of positive payments to your file.
- Fill your credit file with instances of positive payment
You need to be aware of the fact that credit agencies do not receive information that certain suppliers and vendors choose not to share. To offset this, you can manually provide trade references on your credit file. When your file has more positive payments on it, you will be looked upon more favorably.
Mistakes happen without you being aware of them. You need to make sure that the information on your company record and everything reported on it is accurate. Call to dispute anything that should not be on your account such as late payments and ensure you regularly update the information.
- Delete negative collections
You need to ask that an agency deletes any inaccurate or negative histories off of your credit report. If you do not do this, there is no point paying off this debt because the history of harmful accounts will still be there.