Ways Women Owned Businesses Can Improve Their Credit Scores

Ways Women Owned Businesses Can Improve Their Credit Scores

All over the world, this is perhaps the best time of doing business in the history of mankind. The internet is bringing greater exposure, and likewise more customers than ever before and there are more start ups now than ever before. The credit market is also tapping in on the potential of young and dynamic entrepreneurs and they are now more willing to lend as interest rates go up and they are going to make lending more profitable in the future.

The larger banks are approving about a quarter of the loan requests they receive, and smaller banks, mostly approving small business loans approved by the government are accepting about half of them, and with the recent trends, about one third of these applications are being made by women entrepreneurs. It cannot be denied that these loans are extremely beneficial to women and they in turn have managed to play a huge role in the development of the economy. With adequate backing, they are growing well and fast and by improving their credit scores, they will only increase their chances of getting their womens small business loans approved in future as well.

One of the ways for doing so is separating business and personal accounts. While this is true for all businesses, it is especially important for womens businesses because the gender gap is something that has a direct impact on their financial history. So even if the personal account does not have enough funds, make sure that the business account always covers its liability and all the payments for business are made on time. That will ensure that the business credit score will improve even if the personal score does not, but that is enough to convince the creditors to approve your loan. Financers like Bajaj Finserv have great options for business loan for women.

In case of business credit reports, it is important to review the reports at more frequent intervals and put in every item of expenditure, and to make sure they are paid on time. A woman owned business often has a number of woman employees and special arrangements in the workplace are often made for them. Moreover, the company size, the length of credit history, credit utilization, outstanding balances are something that creditors give more stress to and by ensuring that all the needs of the workplace are met, along with the payment made on time, will not only improve the score but will also make a wonderful impression with the creditor.

For a women- owned business, establishing a company credit card goes a long way in making a favorable impression with the creditors. There is no denying the fact that some men doubt the business acumen of the women entrepreneurs but this credit card would be the first step towards making quick and prompt payments, get reward points which can be redeemed, and then making the payments of the business card in time will go a long way in establishing ones creditworthiness. The credit score will improve and will provide a firm ground of making an application.

There is nothing detrimental to a credit score than late payments and so to avoid that, as soon as one has some extra cash in hand, it is advisable to pay the bills in advance than later. Debts are lowered, and you eliminate the risk of making extra payments with fines and dues, which will improve the cash flow and will ultimately, go towards building a good credit score.

One of the best ways to convince a creditor is to have a good business plan in place. A company might have a very strong credit score in the present, and yet when the creditor will interview you about the future of the business, and whether you will be able to repay the loan at the end of the five or ten year tenure, he will want to know will your business will still be relevant enough to make the money to repay the loan? Sadly, women owned businesses have to face this question more than their male counterparts and having a solid business plan in place, which graphs the growth of the business, is the best way to convince the creditors.

Ways Women Owned Businesses Can Improve Their Credit Scores Ways Women Owned Businesses Can Improve Their Credit Scores Reviewed by ravish kumar on April 11, 2018 Rating: 5

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