February 20, 2018
Keeping a positive credit score is crucial when you have a small business to take care of. When you need an unsecured loan for your small business, you can easily find a cash lender, however, getting approved is another story.
Here are the absolute ways to make sure that you always have a positive credit score.
New credit applications
Make sure that you time your new credit applications well. Every time you make a loan application the lender will make an inquiry to the credit bureau for your credit history. If too many inquiries have been done for your credit history, your credit score will take a plunge. What you can do is to make loan inquiries in two to three weeks. Inquiries made in this short time will be considered as just one hard inquiry.
Have a couple of credit cards in your wallet? Credit use has a huge impact in credit score. Credit cards are handy after all when you want to make an immediate purchase without any cash. However, it is best to limit your credit use up to 30% of your credit limit. Higher usage can make a negative impact on your credit score.
Mix of various credit type
A credit card is just one type of credit. The more you use various types of credit such as a personal loan and mortgage from a licensed lender, the better it is for the credit score.
Paying on time
Always pay your loans and credit on time. This will make creditworthy worthy. Every time you pay on time, your payment behavior will be kept in your credit history.
Length of credit history
If you already have an old credit card, make sure to use it from time to time even with small purchases to keep it active. The longer the credit history, the more the credit bureau can keep records of your borrowing history.