Generally, if you want to get a business loan with a good rate, you must have a fairly decent credit score. If you want to get a personal loan for your business, your personal credit score should be at least 640. If you want the loan through your business, your score should be at least 75 (business credit scores work on a 0-100 scale).
If your scores aren’t as high as you would like, here are some simple tips to follow to improve them:
Tips for Improving Your Business Credit Score
- Keep a positive payment history with all vendors
- Pay off your debts as fast as possible
- Ask to increase the credit available because the lower the percentage of your credit you use, the better your score
- Write your current score and goal score down, and develop a plan to get to your goal score
- Keep all business credit cards with which you have a positive history open
Tips for Improving Your Personal Credit Score
- Check your credit report and pay off or make payment arrangements for any collections items found on it
- Pay off any collections actions in full if possible – this repairs your credit score faster than settling the item
- Use less than 30% of your total available credit
- Pay off your credit as fast as you possibly can
- For credit cards you don’t use, keep them open but cut up the card and throw it away. The average age of each credit account makes up part of your score.
- Have as few hard inquiries as possible. The more you have, the lower your score. A hard inquiry happens when a lender checks your credit to make a lending decision. The most common hard inquiries are for loans, credit cards, and mortgages. Soft inquiries do not affect your credit score. They are made when someone checks your credit score just to see how responsible you are with your credit. Examples of soft inquiries include when you are preapproved for a credit card, or if an employer checks your credit report. If you rent a car, get satellite TV, buy high-speed internet, or open a checking/savings account, those are also soft inquiries and do not affect your credit score.
Credit Score Problems are Not a Problem at Reliant Funding
If you need capital to expand your business, but don’t have a good credit score, Reliant Funding may be able to help. We base our lending on the current health of your business, and focus less on your credit score.
If you’ve been in business for at least 12 months, do a minimum of $8,000 per month in sales, and have no open bankruptcies, you may qualify for one of our small business loans.
The entire process takes just a few days to complete and requires no personal collateral. Call us at 877-850-0998 or contact us online to learn more.