Top Tips for Improving Your Credit Score from Our CPAs

Credit scores can certainly seem mystifying. They’re a unique combination of the data analytics efforts of 3 major credit reporting agencies: Experian, Equifax, and TransUnion (or Dun & Bradstreet for businesses). Each of these companies gathers data about your credit history, analyzes your financial creditworthiness, and tells lenders how likely you are to repay your debts in the form of a FICO® score from 300 to 850.

Nobody can opt out of having their credit history rated on this scale, yet it’s a critically important aspect of financial health for businesses and individuals alike. Improving your credit score can mean the difference between securing a business loan, getting a mortgage, or purchasing a big-ticket item to expand your earnings—or your family. So, how can you take control of your credit score and make it work for you? Let’s dive in!

Why Knowing Your Credit Score is Important

Keeping an eye on your credit score gives you a greater understanding of what potential lenders are going to see if you need to apply for a loan or credit card. Watching it over time can help you catch any inaccuracies or signs of identity theft. It can also help you plan to improve your credit ahead of a big event, such as buying a house or acting on an important capital expenditure.

Your credit score doesn’t just determine whether or not a lender will agree to loan you money. It can also determine your interest rate for repaying what you owe. Generally speaking, the better your score, the less you’ll have to pay over time.

What credit score do you start with?

Before you start building credit, you don’t have a score at all. It isn’t zero or even 300 (the lowest possible)—it simply isn’t. Once you open your first line of credit, you’ll get a score, which will likely be somewhere between 300 and 850, depending on your unique circumstances. Scores are calculated based on:

Your track record of making regular, on-time payments
How much debt you’ve accumulated
Your credit utilization ratio (how much money you owe compared to your available credit)
The mix of loan types you have (such as credit cards, car loans, mortgages, etc.)
The length of your credit history (also called credit age)

How to Check Your Credit Score

There are many ways to check your credit score for free. Some methods of checking will lower your score—these are known as hard inquiries, which are used any time you apply for a new line of credit or a credit line increase. But personal reviews (or soft inquiries) won’t affect it, and you should never have to pay for your scores. Instead, try one of these options:

Ask your financial institution about credit monitoring and reporting. Most big names in banking provide this service to their customers for free.

Request a free credit report from the Annual Credit Report Request Service online or via phone call. Through December 2023, you are entitled to free weekly reports.
Use a reputable online credit monitoring service such as Credit Karma.

Tips for Improving Your Credit Score

Always Make Payments on Time

Making your credit card or loan payments on time is the single most important factor in your credit score. It’s best not to carry too much debt, but making the minimum payment on time is better than missing it, especially by more than 30 days. Late payments of 30 days or more can drop your score by up to 100 points and stay on your credit report for more than seven years.

Individuals should set up reminders or automatic payments to never miss a due date. Businesses should consider streamlining their bill payments, either through an upgraded accounting system or working with a Certified Public Accountant (CPA).

Manage Your Credit Utilization

The second most important factor in your credit score is your credit utilization ratio, which is typically represented as a percentage. The lower your balance, the higher your score is likely to be, because it shows lenders that you’re being responsible and spending within your means. Typically, you should use less than 30% of your credit card limit on any given card.

Smart ways to manage this ratio include paying several times throughout the month, paying off your balance before the billing cycle ends, or asking your creditor for a higher credit limit. You’re more likely to receive an increased limit if you’ve recently gotten a raise or have had a good track record with that card for a few years.

Discuss Debt Management Options with Your CPA

Whether you’ve gotten behind on your bills due to illness or job loss, or you aren’t sure how to pay down your accumulated debt, a CPA can help. Debt management is just one of the many things we do for our clients here in Montgomery, both on a personal and business level. We can help you choose the right steps for your situation, from getting you on a good schedule to negotiating with your creditors, and ultimately improving your credit score.

Get Smart About Your Credit with Leadingham Rodgers

Credit scores are a fact of life. But instead of seeing them as a millstone around your neck, you can take control and turn them into valuable assets. As Montgomery’s trusted accounting firm, Leadingham Rodgers is ready to help clients manage their debt, set up a responsible credit history, and rehabilitate their financial health for the long term.

Your Reliable CPAs in Montgomery, AL

Leadingham Rodgers’ CPAs have deep roots in the community here in Montgomery. We’re committed to helping all our friends and neighbors in the area take control of their financial situations. Whether you need business accounting, personal tax help, consulting, or something totally unique, our team is ready to use our expertise to help. Call us today at (334) 721-2548 or reach out online for more information.

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Tax Preparation Checklist for Prattville, AL, Business Owners

August 14, 2026

Proper tax preparation can save Prattville, AL, business owners significant time and money, especially with notable changes taking effect. Whether you run a retail shop along Cobbs Ford Road, manage a service business near McQueen Smith Road, or own a small LLC in Autauga County, knowing what to gather before your CPA appointment makes the filing process faster and less stressful. This checklist covers key document categories, relevant deduction updates, and why a local CPA often outperforms a national chain for complex business returns. Business Identity and Formation Documents Every tax planning engagement starts with proof of who you are and how your business is structured. Your CPA needs these to determine which return forms apply and how income passes through to your personal return. Gather the following before your appointment: your EIN confirmation letter from the IRS; your LLC operating agreement or articles of incorporation; a current Autauga County business license if applicable; and your prior-year federal and Alabama state tax returns. Income Records Accurate income records are the foundation of every business return. Collect profit and loss statements for the full calendar year, bank statements for all business accounts, 1099-NEC forms received from clients who paid you $600 or more, sales records or point-of-sale reports, and tax preparation documentation of any other income such as rental payments, interest, or asset sales. Business Expense Records Deductible expenses directly reduce taxable income, so thorough recordkeeping here matters. Collect documentation for rent or mortgage interest on your business location, utility bills and phone expenses, payroll records including W-2s and 1099-NEC forms issued to contractors, receipts for equipment and software, and mileage logs. The IRS standard mileage rate for business use is 70 cents per mile, so a complete log adds up quickly. Deduction Changes That Matter to Autauga County Businesses Several meaningful deductions are available or newly permanent. Prattville, AL, business owners should factor into their tax preparation. The Permanent 20% Qualified Business Income (QBI) Deduction The 20% QBI deduction is now permanent for pass-through entities, including sole proprietorships, LLCs, S-corps, and partnerships. If your business generates $100,000 in net income, you may be eligible to deduct $20,000 directly from taxable income. Businesses with at least $1,000 in qualified business income may also qualify for a new $400 minimum deduction. 100% Bonus Depreciation Is Back Businesses that purchased equipment, machinery, or other qualifying property may deduct the full cost in the year of purchase rather than depreciating it over several years. This can significantly reduce your current-year tax liability if you invested in your Prattville, AL, operation. SALT Deduction Cap Expanded The federal cap on state and local tax (SALT) deductions increased to $40,400. Business owners who pay significant Autauga County property taxes or the city's combined 9.5% sales tax rate may benefit from tracking these amounts carefully. New Vehicle Loan Interest Deduction Qualifying taxpayers may deduct up to $10,000 in annual loan interest on new vehicles assembled in the United States. Income phase-out thresholds apply, so bring your vehicle purchase and financing documents to review eligibility. Prattville, AL's Local Tax Preparation Layer Prattville, AL, business owners operate under a layered tax structure. The city self-administers its sales tax and requires separate filing through the City of Prattville's One Spot system in addition to state filings with the Alabama Department of Revenue. If your operations cross into Elmore County, your sales tax obligations may differ by zone. A CPA familiar with Alabama's filing requirements can help you stay compliant and avoid penalties. Why a Local CPA May Outperform a National Chain Tax planning for business owners involves far more than plugging numbers into software. National chain preparers typically handle high volumes of straightforward individual returns. For a business with employees, contractor relationships, multi-county sales tax obligations, QBI calculations, and depreciation schedules, a CPA firm with deep knowledge of Alabama tax law is better suited to the job. A local CPA can review your entity structure under permanent QBI rules, evaluate pass-through entity tax (PTET) elections that reduce your federal SALT burden, and proactively identify deductions you may not know you qualify for. Because they work with Alabama businesses year-round, they understand how state and federal rules interact when Alabama conforms selectively to federal changes. What Documents Should I Bring to My First CPA Appointment? Bring your prior-year return, EIN confirmation, profit and loss statement, all 1099s received and issued, bank statements, payroll records, and receipts for major purchases or vehicle expenses. Organized records make tax preparation more efficient and help your CPA complete your return accurately the first time. When Is the Business Tax Filing Deadline in Alabama? S-corp and partnership returns are due March 15. Sole proprietors filing Schedule C have until April 15. Extensions are available but do not extend the time to pay taxes owed. Ready to File? Work With a CPA Serving Prattville, AL, Businesses Pulling together the right documents and understanding the deduction landscape puts you in the best possible position heading into filing season. Leadingham Rodgers, LLC , serves business owners with personalized tax preparation and year-round accounting support. Visit the tax services page or contact us online to schedule a consultation. You can also call (334) 270-3366 to speak with a member of the team directly.

Three CPA professionals engaged in a discussion around a table with paperwork and a laptop.

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