Improving your credit score sounds like a daunting feat, but when you’re knowledgeable and strategic, it doesn’t have to be nearly as painstaking as it seems.
What Are The Best Uses For Different Types of Credit?
The best way to start building and improving your credit score is by understanding the best uses for different types of credit-building tools and using them accordingly.
Credit Cards: Credit cards are great credit building tools to use for typical daily or weekly expenses. If your credit is too low to qualify for a traditional credit card, consider a secured credit card.
Line of Credit: It is best to reserve a line of credit for larger purchases that are not as predictable as weekly restocks, but something you’ll still need credit available on an as needed basis for.
Loan: Loans are for larger, one-time purposes that credit cards and lines of credit would not be able to cover. If you’re looking to purchase new equipment to start expanding your services, you want to renovate your brick-and-mortar shop, or you’re just wanting to free up your cash flow to bridge the slow season, a loan is the right choice.
What Are Some Strategies You Can Employ to Use These Credit-Building Tools Wisely?
Here are some simple strategies you should implement in order to improve your credit as rapidly and greatly as possible.
- Pay on time
- Low utilization
- Become an authorized user on a trusted individual’s credit account if you’re struggling to get approved for credit
- Consider paying utilities with credit
- Limit credit applications to avoid hard inquiries that can decrease your credit score
Because your personal credit does affect your business credit, it is best to implement smart credit strategies into all areas of your life, both personal and business.
Interested in how much you’re qualified to receive through an SBA 7(a) loan with your current credit standing? You can submit an application in just 10 minutes, and we won’t perform a hard credit pull, so your credit won’t be affected.
