Generally, the higher the score, the more trustworthy you seem to lenders. The lower your score, the more problems you'll face. Your credit score is seen as a direct reflection of how capable you are with cash and how dependable you're as a recipient. If you can’t handle your personal finances well, a loaner can assume you won’t be ready to handle your business finances well, either.
This is doubly true if you are a new business owner with no business credit to your name, the sole record of trustworthiness the loaner can have access to are going to be your personal credit score.
When a potential loaner looks at your score, here’s what they see:
Below 579 (Bad):There are some finance options out there for borrowers with this kind of credit score, however, it’s thought of a risk score and can doubtless go together with fewer options and higher interest rates.
580-619 (Poor):Though there are finance options available, they are limited in number. And, a borrower with this credit score can expect fewer choices with a high-interest rate. Additionally, it is considered as a high-risk score.
620-679 (OK):This can be thought of a moderate-risk score. Getting a small bank loan is possible; however, it won't come with the most effective interest rates. If your score falls inside this range, you'll have fewer choices than those with a much better score. Most of the traditional lenders won’t supply a small bank loan to borrowers in this class.
680-719 (Good):This can be thought of a good score and lots of them within the working class fall in this range. A borrower with this sort of score will have plenty of choices at his disposal.
720-799 (Very Good):If your credit score falls inside this range you're deemed as a low-risk borrower. Anyone with this credit score can decide and select the loan that is most beneficial for his or her business.
Above 800 (Excellent):With a score higher than 800, you can expect lenders to roll out the red carpet for you. Borrowers with this credit score can select the credit choices that are best for his or her business.
Click here to know more and apply for a business loan
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
Are Savings Enough for Retirement?
Financial discipline and life aspirations determine whether your savings are going to be enough for retirement.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.
How To Apply For Personal Loan
Applying for a personal loan has become extremely easy these days. With the increase in applicants, banks and other financial institutions have made the process very simple.