For many entrepreneurs, launching a business is impeded by past events. Youthful indiscretions and forced bankruptcies have lasting adverse effects on one’s credit. Before venture capitalists are willing to bankroll your idea, your slate must be cleaned. Observe the following recommendations to repair credit and ready yourself for diving headfirst into a new enterprise.

1. Never Be Late

Past due payments have a negative impact on credit ratings. When lenders and other professional relationships observe your habit of failing to pay on time, it raises doubts regarding dependability. The flipside of this is that resolving debts as scheduled displays responsibility and reflects well upon the payer. Eliminate your largest debts first and consult your creditors if you experience difficulty meeting the terms of your agreements.

2. Limit Credit Usage

Credit scores are deeply affected by debt levels. Lenders examine how much you owe and compare that with your existing credit. If the ratio is too high, it is interpreted as a warning sign. Never access more than 30 percent of your allowable credit. When selecting the credit card you plan on using most often, pick one with a beefy limit.

3. Negotiate With Lenders

If you have a black mark on your record, it can be fixed. Bargain with your creditor to have the error expunged. Send a letter suggesting that your misstep be erased after meeting a certain threshold, such as a specific number of consecutive, on-time payments. Initiate the agreement with a formal letter that clearly outlines your proposal and be prepared with a counteroffer in case your initial bid is not accepted.

4. Maintain Accounts

Creditors need observable activities to evaluate trustworthiness, so keep accounts open. It may seem wise to close an existing account, but this action can be harmful. Keep multiple accounts, but no more than you are comfortable handling. Establish automatic payments to assure they will not be missed and monitor your balance so checks never bounce.

5. Use References

Just like with personal résumés, those considering your record want to know that others have had positive experiences working with you. Inform moneylenders of vendors or business partners with which you have had solid relations. Prominently display their words of approval on your website. Those who inspect your history will experience a boost in confidence knowing you have a habit of displaying good character.

Prevent your past from becoming the stumbling block that causes your dream venture to falter. Review your financial history and take measures to repair credit before it creates trouble.