How to boost your credit score and use it to get your small business off the ground

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How to boost your credit score and use it to get your small business off the ground
2 years ago
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Starting a small business involves a huge amount of money, which most people get from loans. In order to qualify for good small business loans, however, you need to have an impressive credit rating. Before you apply for a small business loan, make sure that you are in good credit standing. Doing so lowers your chances of your loan application getting rejected. Here are the most important things you have to do to ensure that you have a good credit rating:

1. Get in touch
Get in touch with any of the credit reporting agencies -- Experian, Equifax or TransUnion -- and request for a copy of your latest credit report. In case you didn?t know, you can get a free copy of your credit report annually from these three credit bureaus. Use the information in your credit report to find out the areas where you need to improve on and take the necessary steps to improve your credit score.

2. Examine report
Examine each item in your credit report. Check to make sure that all the information is accurate and updated. By reading and understanding the contents of your credit report, you will be able to gauge the quality of your performance as a consumer during the last few months.

3. Contact credit bureaus
If there are erroneous entries in your credit report, be sure to report those errors to the agencies right away. It does not matter if an error is as simple as a typographical error or as serious as a suspicious trace of identity theft; you need to have it corrected.

4. Improve skills
Improve on and use your negotiations skills. By having an open conversation with your lenders, you might be able to convince them to lower interest rates and monthly payments on your current debts.

5. Present facts
If there are some impressive financial facts about you, these may be included in the report that you submit to your lenders. Not only will they make your report glow, but they will also improve your chances of being approved for a small business loan.

Better credit history equals more chances of small business loan approval
After you have improved your credit score, all you need to worry about now is finding a lending company from which to borrow money. Wherever you choose to borrow money -- banks or other lending institutions -- credit scoring will probably be the method used by the lender to determine whether your loan application will be approved or not. With credit scoring, it will be very easy to determine an applicant's approval, making the process much shorter and simpler.

The many advantages of having high credit score
More and more people have actually been showing an interest in improving their credit scores in the last few years. This can be attributed to the growing financial nature of our society, or simply the desire to have a better financial future.

Your credit score may only be a number but it can say a lot more about your financial status than you can possibly imagine. For example, by taking a look at your credit score, any company would be able to see whether you are responsible and punctual in paying your dues or not. Having a high credit score certainly boosts your chances of getting approved for small business loans, or any other loan for that matter.

But contrary to what many people think, the computation of your credit score is not only dependent on your latest financial actions but on your entire credit history. The kind of credit score you have will essentially determine whether you will be approved or rejected for a small business loan. For this reason, you should do everything you can to boost your credit score as soon as possible.
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