Proven Tactics to Strengthen Your Financial Foundation and Unlock Better Funding Options
A strong credit score is crucial for construction businesses looking for good finance deals for equipment purchases. It not only means lower interest rates but also shows that you handle money wisely. In this blog, we’ll look at practical ways for construction businesses to improve their credit and get better finance deals.
Prioritise Reviewing Your Credit Report
Before we get into the nitty-gritty of boosting your credit score, take a moment to look over your credit report. This step is like the foundation of a building – it sets everything else in motion. Get your report from trusted credit agencies so you can see where you stand financially. This may differ whether you are a sole trader or a Limited company, so be sure to check.
Go through the report carefully, keeping an eye out for any mistakes or things that don’t add up, like wrong account details or payments that are being disputed. Fixing these issues is vital as it can make a big difference to your credit score. This careful approach makes sure you’re working with accurate and solid financial info, which will make the rest of the process much smoother.
Make Sure You Pay Your Bills on Time
Paying your bills when they’re due is a big deal when it comes to showing how reliable you are with money. Being on the ball with payments is a sign of being smart with your finances. If remembering due dates isn’t your strong suit, think about setting up automatic payments or using reminders to make sure you never miss one. This way, you’ll be on top of your financial game, and it’ll reflect positively on your creditworthiness.
Manage Your Credit Card Balances Wisely
It’s smart to keep an eye on how much you’re putting on your credit card. Pushing the limit can bring down your credit score, so keep things balanced by aiming to use no more than 30% of your credit limit. Getting that credit card debt down is a quick way to give your score a boost. So, remember to keep those balances in check and watch your credit score rise.
Be Cautious When Applying for New Credit
When you apply for new credit, it’s like a little flag on your credit report. Too many of these flags in a short time can actually bring your credit score down. So, be careful about signing up for new accounts. This way, you’re protecting your credit score and making sure it stays in good shape. If you are looking to make multiple purchases within a short period of time (say, 90 days), it may be worth applying at the same time, to reduce the number of searches. We call this a credit line facility.
Retain Old Credit Accounts
How long you’ve had credit is a big deal for your credit score. Closing old accounts can actually make your credit history shorter, which might bring your score down. So, even if you don’t use them all the time, think about keeping those old credit accounts around. They’re like little anchors that help keep your credit score steady. Just be sure there are no unnecessary costs involved with holding the account open.
Be Thoughtful About Debt Consolidation
Debt consolidation can be a helpful move, but it’s important to think it through. When you combine different accounts into one, it might mess with your credit balance, which could bring your score down a bit. Before you make any big changes to how you handle your debt, it’s a good idea to get advice from a professional. They can help you figure out the best way to go about it without putting your credit score at risk. Also, be mindful of early repayment fees, as you may end up incurring ‘double interest’ if you are not careful.
Nurture Strong Business Connections
Building solid connections with suppliers, subcontractors, and other partners can bring about better credit terms. Paying on time and keeping the lines of communication clear and open can help create trust. This trust can be key to unlocking even better financing opportunities for your business. So, invest in those relationships – they might just pay off in more ways than one.
We Can Help
Boosting your construction business’s credit score is a savvy step that can make a significant difference in securing better finance deals. By following these approaches and maintaining responsible financial management, your business will be in a stronger position to tackle new projects and investments with confidence.
At Full Metal Finance, we understand that credit scores can often be a significant hurdle to growth. We pride ourselves in working with clients of all credit profiles and excel in assisting businesses grappling with less-than-ideal credit scores. Not only can we help you to secure financing, but we do it in a manner that is both financially sound and sustainable. Our expertise lies in tailoring solutions that align with your unique needs and circumstances, ensuring that financial empowerment remains within reach, regardless of credit history. Full Metal Finance isn’t just a financial partner; we’re an ally dedicated to helping your businesses thrive, no matter where you stand on the credit scale.
Get in touch
Ready to elevate your business’s financial standing? Get in touch with Full Metal Finance today and find out how we can help you start implementing these strategies and pave the way for a brighter future.