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.
Once you know your score, you know what you’re working with and can get the information you need to raise your score, including which accounts are negatively affecting your report and any disputable items on the report.
One of the easiest, and most recognizable ways to improve your score, paying your pills 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.
- Decrease your credit utilization ratio
One of the things credit reporting agencies look at when determining credit scores is the ratio of credit used in relation to the amount of credit available. It’s typically a good idea to keep that ratio under 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.
- Add positive payment experiences to your credit file
Not all vendors and suppliers share information with business credit-reporting agencies. Add trade references to your company’s credit file manually. The more positive payment experiences you can add to your file, the better.
It’s important to insure that what’s being reported on your company is accurate. Hard inquiries and unpaid accounts negatively affect your report, so if you come across something on your report that shouldn’t be there, call to dispute it.
- “Pay for delete” with collections
Make sure that an agency will delete the negative account from your credit report. You have to explicitly ask for this—otherwise, paying off this debt won’t help your credit score because it will still show a history of negative accounts.