The Importance of Having Good Credit For Business Start Up Or Expanding
We can not do anything to change the economy today, however, you can increase your chances for getting a loan to expand are start your dream business. The banks are tightening up on their loaning guidelines. even the small business administration has also cut their loans down by 31 percent. The current recession has caused our banking systems to require more documentation. There is good news! They have not stopped giving loans all together if you have good credit.
lenders look at your credit score before approving you for your business. Here are some things you need to know before attempting to get a loan.
. Lenders get there info from FICO scores and credit reporters.
. FICO is fair Issac Corporation it is a three digit number used to analyze your credit score.
. It ranges from 300 to 850, this tell the lender how likely your are to pay your loan.
There are some steps you can take to begin repairing your score.
. You should start by getting your credit report
. You can get it from the three reporting agencies.
. Experian
. Equifax
. TransUnion
. Request it if you have filed for a loan and been rejected.
You can also get a free credit report once a year from these three agencies. For your free credit report, visit If you want to find out your FICO score that is $47.85 for a one time purchase. You may sign up for automatic repurchase
Ways to fix your credit and review your report. If you find errors on your report such as accounts that were not yours, you may dispute items that have been on your report to long. Such as negative information that has been on your report for more then seven years, or bankruptcies more then ten years. This is how you go about reporting these errors tell the consumer reporting company in writing write what the error is. Send a copy of the document that you dispute and copy of your credit report with the error circled. Keep a copy of your communication also.
The credit reporting agency has 30 days to investigate. However, if you have any loans that you know you are late on do not dispute them they will get kicked back and it will only further your grief. So if your in the hunt for a business start up or expansion do your home work. Try to get your scores up in the 700 to 750 range to better you chances for lower down payments and lower interest rates. I hope my research can help you out. Good luck with your new business.