The SOS Bookkeeping team know that your company’s credit score is important. To be able to borrow from lenders, or negotiate trade credit with your suppliers, your business needs to prove that it’s a low-risk business to lend to.
What can you do to keep that credit score up? Here are some tips from the SOS Bookkeeping team:
Improve your payment performance
Paying your creditors on time, and in full, creates a good payment history. The credit agencies will look at how long it takes you to pay your suppliers and main providers. If you’re consistently late in paying, that sets a bad precedent and will bump up your risk in the agencies’ eyes.
Don’t apply for multiple credit facilities
When cash is in short supply, the temptation is to borrow as much money as you can. But if you apply to multiple lenders for credit facilities, this is bad news for your credit score.
Credit agencies won’t look favourably on your need to borrow from multiple sources. In a best-case scenario, it shows that you don’t currently have enough liquid cash in the business. In a worst-case scenario, it demonstrates that you’re badly organised, poor with managing cash flow and showcases rising debt in the business.
Avoid any red flags against the company or your directors
Credit agencies are looking for evidence that you’re creditworthy, low risk and that your people are ‘fit and proper’. Any history of insolvency will act as a red flag and will have a negative impact on the company’s credit rating.
If you would like to discuss your business needs. Call SOS Bookkeeping on 01 849 5131 or email shane@sosbookkeeping.ie For the latest business/practice news, taxation/financial resources and our Newsletter, visit https://sosbookkeeping.ie/