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What are the steps that you will need to take if you are looking to apply for business credit? Continue reading to learn more.
A credit score is more than just a number—it’s a measurement of your creditworthiness over your lifetime. It’s essentially a snapshot of your credit history, but most people don’t realize how important their history of borrowing and repaying is for other aspects of their life.
Whether you’re leasing a vehicle, applying for a job, or securing a business loan, there’s a strong possibility that the person on the other end of the deal will perform a credit check to learn more about your history.
They can tell a lot about you from just that one number, like your ability to make timely payments, how often you use credit cards, and much more, but it’s not as informational as they assume.
As you know, one mistake can cost you some serious points off your credit score. For example, one missed payment can cost you 180 points off your score, which will stay on your report for up to 7 years. If you were to have your credit checked within these 7 years, the evaluation would reveal this missed payment and, unfortunately, it may impact your ability to secure the assets or services you need.
One small mistake 5 years ago could potentially cost you a business loan in the future, so it’s always important to stay on top of your credit repayments to ensure future-you can grow without restraint.
A credit check can be scary if your score is less than favorable, but with some proactive steps, it becomes a whole lot easier. Here’s all the information you need to know about your credit score checks and some of the best steps to take if you’re looking to get in the best shape for approval:
Credit check companies also look at public records when they're considering someone for credit, including information on bankruptcies, foreclosures, or judgments against you. If there's negative information in your public records, it can make it harder to get approved for credit.
Finally, credit check companies may also consider other factors when deciding whether to give you credit, like your employment history or annual income. If you have a stable job and a good income, that can make you a more attractive candidate for credit.
1. Understand the Importance of a Good Credit Score
A credit score is a numerical expression based on an individual's credit transactions over their lifetime. It represents the “creditworthiness” of an individual, with the information behind your score coming directly from credit bureaus. Lenders, such as banks and credit card companies, use personal and business credit scores to evaluate the potential risk posed by lending money to an individual or organization. Good credit (670 to 739 FICO score) opens doors to the best interest rates on home loans, auto loans, and other lines of credit. It can also qualify you for premium rewards on credit cards or early repayment discounts on business loans. Alternatively, a bad credit score could disqualify you from favorable rates and terms, leaving you stuck with high-interest rates, collateral requirements, or other subprime offers. For this reason, it's important to prepare for credit score checks accordingly.-
1 year in business
- Even as a young, growing business, you can still find financing options
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$120K in annual revenue
- To qualify, your business must be generating a minimum of $10,000 monthly
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580+ Credit Score Require
- We have financing options for businesses with excellent and bad credit.
- Your payment history
- Your outstanding debts
- Length of your credit history
- Amount of credit accounts you own