Credit Score 101

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Wednesday, November 4th, 2015

Everyone who has ever applied for a loan knows the term credit score. National Business Capital, a leading alternative lender wants loan applicants to have an understanding of what their credit score is and how it may be used as a factor to determine their loan worthiness. You may be wondering: What is it? How is it used to influence loan approvals? What is a good credit score? How to increase a credit score? Here we will address each concern and provide present and future funding applicants with the knowledge they need to present themselves and their business optimally National Business Capital as their prospective lender.

What is a Credit Score and What’s a Good Credit Score?

A credit score is a three-digit number that is derived from an individual’s credit report. This report assesses creditworthiness and how likely you are to repay your debts on time. Your credit score is often called a FICO score after the independent firm that created predictive analytics, which is their widely-accepted formula for determining the amount of debt an individual can carry as well as their ability to repay that debt. FICO scoring ranges from 300 – 850 and is determined in part by an individual’s payment history, debt/amounts owed, the age of their credit history, new credit inquiries, the mix of accounts they maintain as well as the different types of credit they have already.

What’s a good credit score? Generally at a bank, those with a FICO score of 760 or higher will receive the most favorable rates when they borrow money. Chances are if you have been turned down for a business loan by your bank, a low FICO score contributed to the traditional lending institution’s unwillingness to extend you credit. But, a 760 FICO is not needed at National Business Capital. We are able to fund clients with less than stellar credit.

How To Increase a Credit Score?

Ask to see the credit report that was used by the lender to determine your creditworthiness. It will include reason codes to explain where you lost points in your credit score calculation. Next, outline a plan to remedy the situation. High credit card debt is a leading factor in a low credit score. Work to pay down your credit card balances and you’ll see your score improve very quickly. Another negative is unpaid bills or bills in collection. Here again, it is imperative to pay your bills on time and work out alternatives before your bills go to collection agencies. When working on how to increase a credit score to improve your creditworthiness, speak to National Business Capital. A low credit score is not a loan disqualification at National Business Capital. If you do not know how to increase a credit score, we can coach you. We will strive to assist you to receive the funding your business requires. Establish an ongoing business relationship with us and we will assist you to improve your credit score and your creditworthiness. Learning how to increase a credit score is the first step to achieving your business goals. National Business Capital will show you how.

What is a good credit score? It is the one you will develop over time when you put your trust in National Business Capital. Need financing for your business? Fill out our form or call us and we will get a dialogue going: (888) 888-9124.

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