There is no one ideal business credit card for a company that has fair credit. With the tightening of lending standards, it is becoming more difficult to find business credit cards for companies that are rated as being moderate risk. But with some effort, you will find a few reasonable business credit cards that will help you with your business transactions.
Use the FREE credit card finder to pick the ideal business credit card that will help your company grow!
As banks scrutinize your business’s financial history and find a middling credit score, it is likely that you will get a limited line of credit. But the good news is that there are options that can help you slowly erase your past financial challenges and raise your business credit score. But you must be aware that credit cards for companies with fair business credit rating will either have to be secured, be prepaid, or have higher interest rates.
Business Credit Score
According to the U.S. Small Business Administration, business credit rating is different from personal credit scores. While both scores are used to judge creditworthiness or the ability to make timely credit card payments, the means of calculating credit history is different.
A business credit score is calculated on a 0-100 scale, with any score above 75 being considered excellent. When one company extends credit to another, they are given trade credits. Business credit bureaus produce business credit reports that are based on trade credit information.
It is very important to remember that your business credit rating will be based on information provided by your vendors to credit rating agencies. So make sure your vendors are reporting all your transactions in a timely fashion.
It is your responsibility to track your business’ credit rating. You can find your business credit rating information from the following sites:
- National Association of Credit Management Report
- Equifax Business
- Experian Business
- Dun & Bradstreet
How You Can Raise Your Business Credit Rating
According to Entrepreneur magazine, business credit rating is affected by a multitude of factors besides timely payments towards your debt. It is also affected by how much credit is available to you, how long you have had your credit profile as well as the number of enquiries made about your profile, among others.
Some of the steps you can take to secure your credit rating are as follows:
- Register your company with the business credit card bureaus.
Make sure you meet all business credit market requirements including having all needed licenses, a listed phone line, among others. You can find all the requirements at iBank.com:
- Make sure that you meet your monthly payment obligations.
- Keep an eye on your business credit rating to assure that your vendors are reporting all your payment transactions to the business credit rating agencies.
- Make required monthly payments to credit grantors, which will keep your business profile active.
- Protect your personal credit rating by keeping it separate from your business credit rating.
Business Credit Card Options Available to You, Given Your Fair Credit Rating
A fair business credit rating indicates that you are a moderate risk for debt repayment and therefore it may be a little challenging to find a credit card company that will extend you a line of credit.
However, the U.S. Small Business Administration is a great resource that lists credit card companies, which are willing to give credit cards to businesses with low or bad credit ratings.
If you cannot find a credit card company that will extend a traditional credit card offer to your business, you can consider either a business secured credit card or a prepaid credit card.
A business secured credit card is much like a personal secured credit card. As a business, you deposit a certain amount of money into an account. This becomes your maximum limit and you can draw upon this amount to make payments. As you build your credit by making timely payments, the bank might return your deposit and extend you a line of unsecured credit.
Unlike a business secured credit card, a prepaid credit card requires no credit check. At the same time, prepaid credit card transactions are not reported to the business rating agencies and therefore, do nothing to raise your business credit rating. But these cards that act like bank debit cards are great tools that can help you lower your business debt and have the additional advantage of being topped up as often as required.
How Long it Will Take to Restore or Build Your Credit Rating
This depends on your present business credit score and ongoing financial decisions. Even as business credit rating can take years to build up, it can be done using the various credit card options available to you.
The ideal business credit card is one that allows you maximum flexibility with payments while extending an advantageous APR as well as fair terms and conditions.
If you maintain financial responsibility, you will see a steady rise in your business credit rating.
How You Can Get the Ideal Business Credit Card
In spite of tighter lending standards, you will find credit options that will help you build your business without extending you to your limit. But you have to be careful about understanding all the terms and conditions that come with the lines of credit.
Fortunately, you can compare rates and terms of ideal business credit cards using the FREE credit chaser tool and raise your rating from fair to fantastic!
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