Tips for improving your credit score

Credit cards in pocket

At some point in the life of your business, you’ll likely need to borrow capital.

That’s why it’s important to build and maintain a solid credit score now – so when the time comes to apply for financing you’ll be able to prove to a lender you’re a good risk.

Here’s some simple steps you can take today to raise your credit score.

Know your numbers

A quick online search can help you find out where you stand with your creditors. Simply contact a credit reporting agency (e.g. Equifax) to request your free credit report.

The calculation is based on a number of factors, but the one that carries the most weight is your payment history.

When calculating your rating the credit agencies take into account whether you:

  • pay your bills on time
  • make at least the minimum monthly payment on your credit card balances
  • have defaulted on any loans, or
  • have accounts in collections.

It’s recommended that you review your credit report annually to ensure there are no errors or omissions that may negatively impact your score.

Use credit with care

Although it can be difficult for a small business to qualify for a business loan or line of credit – especially if you’ve yet to prove your company’s profitability – you may still be able to qualify for a company credit card.

A business credit card offers you an opportunity to build good credit at a low risk. Most likely you’ll be offered a card with a small spending limit at first. Use it wisely, and commit to paying off your balance in full each month.

As you know – based on how your credit rating is calculated – there’s no better way to establish good credit than to pay your bills in full and on time.

Smart credit strategies

  • Use this free debt repayment calculator or the free ASIC Money Smart credit card calculator and make a plan for paying off your debts as quickly as possible.
  • When it comes to revolving credit, use no more than 30 percent of your available credit. The lower the percentage, the better for your credit file.
  • Talk to a lender about consolidating multiple credit card balances to a lower interest finance product such as a personal loan, mortgage line of credit, or a low-interest credit card.
  • Make multiple credit card payments throughout the month to avoid late payments, pay down your debt faster, and lower your interest fees.
  • Make extra repayments on the lowest balance credit card to pay it off quickly. Once it is paid off, direct these payments to the next lowest credit card and combined with the existing repayments of this card will mean it will be paid off quickly too.


Review our resources for tips on financing.

Final thoughts

When it comes to improving your credit score, slow and steady wins the race.

To help you stay motivated, keep your long-term goals in mind. This will help you make the effort needed to save money, keep to a consistent payment schedule, and use your credit wisely.

And when it’s time to invest in scaling your business, opening another retail location, or purchasing new equipment, you’ll be set to apply for financing with confidence.

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