improve credit score

Clean Up Credit Score

In the midst of such trying times it is all too easy for even the best run businesses to end up with black marks in their credit scores. Whether due to rising costs, falling sales, delinquent suppliers or bad debts, it is all too easy for your credit rating to take a tumble.

Credit bureaus like to see that people are in full control. In particular they like to see people use only a small portion of their available limit and pay the outstanding amount off in full each month. Those who do this see their credit scores rise and remain high.

If you have suffered financial difficulties in the past your business may no longer be eligible for a traditional credit card, but you may be able to obtain a small business secured credit card instead.

improve credit scoreA secured credit card is only issued after the customer makes a collateral deposit. This sum then becomes the credit limit for the card in question. For example, if you place $500 in the account, then you can ‘borrow’ up to that amount on your card.

Even if the owner or the business itself has a poor credit rating, the lender who issues a secured credit card knows their money is guaranteed because they are always holding sufficient collateral to cover whatever has been spent.

Credit scores are based on the FICO scale which runs from a low of 300 to a high of around 850. Scores below 580 are problematic when it comes to obtaining credit. Using a secured credit card can help your score to rise over time, just so long as you do not exceed your pre-agreed limit and pay all of your bills promptly.

Although there are many card providers on the market and some may offer deals that on the surface appear very appealing, it is probably best to stick with the mainstream lenders as they are far more likely to send reports to the major credit bureaus. Unless this happens, your score will not improve no matter how sensibly you use the card.

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