Entrepreneurs often have to try out a couple ideas before they find that business that really sticks. This is a common practice for many entrepreneurs and it can be very effective for creating a successful business. However, there are of course always down sides to starting a number of different businesses. One of those downsides is the fact that the entrepreneur’s credit score is sure to take a hit from starting and stopping a number of different business ventures. This can not only hurt the entrepreneur’s chances of starting a new business, but it can also hurt the entrepreneur’s personal financial standing.
Entrepreneur’s may think there is no other way to get funding for new business ventures than to damage their own credit score with lot of new lines of credit and debt. This does not need to be the case. Entrepreneurs can start their new businesses and improve their credit at the same time. Here are some ways that entrepreneurs can improve their credit scores.
GET A CREDIT REPORT
A credit report is essential for any entrepreneur who wants to start improving credit scores. Without a credit report, entrepreneurs will have no idea where to start to improve their credit. A credit report will tell entrepreneurs what they need to do to improve their credit scores and keep them high in the future.
ADD COMMENTS TO THE CREDIT REPORT
Few people realize this, but there is a place on a credit report for people to leave comments about their report. Entrepreneurs can use this area to justify or dispute any delinquencies in an effort to improve their credit score. This may not always be effective, but entrepreneurs can have some issues reversed through this process.
BEGIN TO BUILD BUSINESS CREDIT SEPARATE FROM PERSONAL CREDIT
Most entrepreneurs will need to start their businesses using their own credit, because of course, their new business will not have any credit to use yet. Entrepreneurs can fix this by beginning to build credit for the business and take on less themselves. Having separate lines of credit will be beneficial to both the entrepreneur and their business.
PAY OFF OLD BILLS
Entrepreneurs who are excited to move on to the next business venture may forget or neglect paying off old debts from previous businesses. This can harm their credit scores and prevent them from getting new lines of credit. Entrepreneurs should focus on paying off all old debts before they can begin to move on to new lines of credit for their new business.
KEEP LOWER BALANCES
Balances on lines of credit for entrepreneurs might be high in the beginning of a new business. However, high balances can hurt an entrepreneur’s credit scores. Entrepreneurs should try to instead keep low balances to maintain their credit score and improve their business’s financial standing. This can be done by focusing on internal business credit and creative ways of paying off debts for business equipment and supplies.