As a business owner, you’ve probably heard of credit repair, but have you heard of tradelines? Credit repair is when you work to clean and repair a poor credit score. Tradelines help businesses to build or re-establish a positive credit history.
If you’re a business owner having problems with your credit score and credit history, this guide will help compare both tradelines and credit repair options so you can make informed decisions. Let’s take a closer look.
Table of Contents
The Pros and Cons of Tradelines for Businesses
When used properly, tradelines can be extremely effective and beneficial to businesses with credit problems. The advantages of tradelines include but aren’t limited to:
Pros:
- Helps to boost your credit scores quickly.
- Increases your chances of getting approval for business loans faster.
- May help with scoring lower interest rates on certain loans.
- Increases your chances of becoming a reputable business to other suppliers where you purchase your products from.
- May gain access to better options for insuring your business.
- May improve your chances of getting more businesses through the door.
While these are great advantages for business owners, there are some disadvantages too.
Cons:
- Initially there could be credit limitations.
- You may be charged higher fees
- You may be limited to purchases with only certain suppliers or vendors
- For faster payments you may forfeit discounts that you’re eligible for.
- A closed account can remain on a tradeline for up to 10 years according to Investopedia.
It’s important for any business owner to research the best tradeline companies and review what they have to offer to work out whether tradelines are the right choice for your company.
The Pros and Cons of Credit Repair For Businesses
According to Consumer Affairs, there’s around 44,000 businesses in the USA alone that offer credit repair services to companies. Credit repair is another option you can try if your business’s credit score is affected. Repairing your credit score has many advantages which can include:
Pros:
- Improves your businesses creditworthiness which in turn helps you to build better supplier relationships and gain access to better financing options.
- It helps to remove errors and inaccuracies from business credit reports to showcase your businesses true financial health.
- It can help you build a better reputation with investors, creditors and partners.
- It allows you to have increased credit limits from time to time.
- It gives you a competitive edge when it comes to market positioning.
These are just some of the advantages of repairing credit vs using tradelines. But with advantages comes the disadvantages which can include:
Cons:
- Extremely time consuming and requires a lot of time, effort and patience in order to clean up a poor credit score. In some cases it could take months to years to fix a lengthy dispute against your credit score.
- It may require extensive resource allocation in order to really repair the credit score.
- It could cost you a lot of money in hiring a credit repair company. You may also be susceptible to scams if a credit repair company isn’t as good as what they say they are.
- You won’t have the immediate impact as you would with tradelines. This is because repairing credit is a gradual process.
Poor credit can occur when you miss a payment but before deciding to repair your credit it’s important to weigh up the pros and cons and the cost involved as well.
Endnote
Tradelines vs credit repair is a hot debate for many businesses. Deciding which one is right for you comes down to whether you need your credit score fixed fast or if you’re happy to work on it over a long period of time. No matter which one you choose, always research and understand the complexity and costs of both options, so you can make an informed decision.
