How to clean up your business credit report

Having a stellar credit report is an important factor is you are looking to get a small business loan. Knowing and understanding your credit report and credit score is essential in being successful, in the world of business finance. There is simply no getting around the fact that in order to get financing for your small business, you have to have good credit and a good credit score. Every small business owners should understand that there are often errors on credit reports. Because of this it is important that you get a copy of your credit report from all three credit reporting agencies, and correct any errors that you find. Finally, you should understand that the process of cleaning up your credit (if you need to), can take a lot of time. Because of this if you are considering seeking a loan or line of credit, for your small business, you should begin the process right away.

• Remember that you are entitled to one free credit report each year. There is a website where you can request that annual credit report and you will receive it free of charge, from each of the main credit reporting agencies. Those credit reporting agencies are Equifax, Experian, and Transunion.
• Pull your personal and business credit reports, when checking credit worthiness. You can request your business credit report from the three credit reporting agencies along with your personal credit report. It is important to do this since you need to be sure there are no errors on your business credit report just like you need to be sure there are no errors on your personal credit report.
• Stop applying for credit. This is an important step if you are looking for financing, for your business. You should stop applying for credit cards, loans, or lines of credit immediately. If you are declined for any of these, it is a negative on your credit report. If you have too many declined applications, that can be a huge negative on your credit report. It tends to make you look desperate and can label you as an irresponsible user of credit.In addition, the more credit you have on your credit report, the lower your credit score will go.
• Go over your credit reports, with a fine tooth comb. After you get your free credit reports, (business and personal), from all three credit reporting agencies, you should go through each report line by line. Be sure that each debt you have had in the past shows that it is paid off. If you have kept accounts open or closed, your credit report should reflect that as well. If you have closed an account it is also important to make sure that your credit report notes that it was closed at your request, not by the company.If this was reported incorrectly, you will need to call this to the attention of the credit bureaus. You should also check each account that is open, for your record of late and on-time payments. If the credit bureau has incorrectly reported a payment late that was made on time, you need to bring that to their attention. Any late payment is a problem and will bring down your credit score. Keep in mind that you will need to have documentation to prove that you made any payments reported late on time. If you can explain any late payments, do that in a letter that is accompanied by documentation, such as a canceled check. Remember that you need to send this information to each credit reporting agency that shows this erroneous information.