If your company has a bad credit profile, it could hurt you later for future loans or lines of credit. Even more important than your personal credit profile, your company’s credit should be spotless — or as close to perfect as possible. Cleaning up your company’s bad credit profile isn’t a walk in the park, but you’ll be glad you took the following steps when you can finally get the financing you so desperately need.But before you sign Emergency Cash Advance or some other debts, be sure to remember these guide along.
First, you need to know exactly where you stand with the credit bureaus and with your creditors. The fastest way to do this is by ordering a credit report from all three credit bureaus — Experion, TransUnion and Equifax. Once you have them in hand, go over them with a highlighter and a red pen and determine which accounts are past-due and which are in danger of becoming past due. Highlight the accounts that need to be taken care of soon, and circle the ones that need to be addressed immediately. If you’re going clean up your company’s bad credit profile, you’ll need to know exactly who needs to be paid.
Your next step is to determine your financial situation, which will directly impact how much of your debt you can satisfy. If you are in a precarious financial situation, don’t panic; you don’t need to file for bankruptcy yet. Instead, make as many payments as possible, then determine how long it will take you to pay off the rest. You should especially look at any accounts which will affect your personal credit file. If you guaranteed any loans or lines of credit, you could put your own credit situation in jeopardy.
Your company’s bad credit profile isn’t the end of the world, but it does deserve your immediate attention. The fastest way to clean it up is to start contacting your creditors to work out a payment plan. If you have a positive payment history with them, none of your creditors should have a problem setting up a reasonable payment plan; if not, you might have to work extra hard to get them to work with you.
You should also make sure that each of your creditors has you current contact information. In many cases, a company’s bad credit profile isn’t due to a lack of funds, but instead a glitch in communication. If your accounting department isn’t getting your bills, they aren’t paying them, which could lead to negative credit information. If this is the case, you need to talk to your creditors about the situation and pay off the accounts as quickly as possible.
It is just as important to make sure that it isn’t an internal problem. As the owner of a business, you are likely not involved in the day-to-day paperwork that must be taken care of in order for your company to survive. Cleaning up your company’s bad credit profile might be as simple as working out snags in your accounts receivable and accounts payable departments. Is everyone aware of which bills need to be paid in full? Are they taking care of bills as soon as they come in?
Obviously, if the problem is internal, you’ll need to take steps to ensure that it doesn’t happen again. A properly-trained accounting department is crucial to the survival of your business — and to a better credit profile. Talk with your accounting manager to make sure his or her employees are doing their jobs. If not, you’ll need to make some changes.
And finally, make sure that you aren’t overextending yourself. If your company’s bad credit profile is due to the fact that you aren’t managing your credit well, you’ll need to stop borrowing money and accepting credit until you can get things back on track.