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Managing Credit for Positive Credit Score

Simple Alliance, Kenya Limited


Credit Rating

Your business’ credit rating is the assessment that credit reporting firms make on your business. You could be ranked high or low. Your rating depends on your ability to settle past fiscal obligations on time. This is basically your credit management habits contained din ypur credit history. These credit reporting companies gather data from the government, financial institutions, or from your business partners.      

Significance

Your credit rating will assist potential creditors and lenders to determine whether it would be prudent to do business with your business. These partners use your credit ranking to evaluate your ability to settle debts.  Your credit score impact on two crucial business parameters, namely:

  • The interest rates that financial institutions impose on you
  • The payment terms that creditors offer you  

Your Take

In view of the above mentioned importance of your credit rating, you would aspire to always have a positive ranking. This would call for the setting up of suitable means of managing credit.

Protecting and Improving Your Credit Rating

Some recommended measures you could implement include:

  • Regular evaluation of your credit report
  • Timely bill payment
  • Updating your credit report
  • Obtaining secured credit

Frequently Evaluating of your Credit Report

So as to ensure that recipients of the credit report will have an accurate view of things, regularly review your credit report. After securing the report, focus on the following elements:  

  • Ensure that your major credit relationships are included
  • Scan for inconsistencies such as old accounts still listed as active and errors

Paying your Bills in a Timely Manner

Your habit of settling bills by their due date is a sign of your responsible financial management. This image will have a positive effect on your credit rating.

Opting for Secured Credit

Secured credit facilities have collateral tied to them. These financing arrangements affirm your creditworthiness.  Your judicious repayment of the loan establishes a firm credit history for you.    

Bringing your Credit Report Up to Date

For accuracy, you need to take measures to rectify any erroneous information on your credit report. Some common mistakes include:

  • Misdated figures
  • Missing data
  • Misquoted figures

Missing Data

To manage missing data, get in touch with your creditors and ask them to forward the relevant information to credit reporting firms.

Misquoted Figures

In case, the credit bureau misquotes some figures, say, your yearly income, ask them to update the information. You need to do this correspondence professionally.  Your written request needs to bear your tax identification number and business name details. You also need to submit copies of any supporting documents to the credit reporting firms.

Your credit rating could have serious ramification on your business ventures.  Normally, your prospective lenders study your credit report so as to decide whether to extend credit to you or not. The business partners’ seek to examine your credit management trends or your credit history. Likewise, potential creditors evaluate your credit report in order to evaluate your payment ability. You thus need to keep your credit report without blemishes. You have various apt avenues of managing credit.  This initiative involves regularly reviewing the report for errors. You need to liaise with the relevant entities to have these mistakes rectified. A habit of settling your debts within the stipulated time also helps to improve your credit rating. If you seek a loan, choose a secured one so as to up your credit worthiness. Repay the loan as per the agreement.

Copyright (C) 2016, Simple Alliance Kenya Limited

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