Your business idea first begins with a dream, and then extends to a passion. The passion to do what you love leads you to need financial assistance. Having the means to expand on your passion will bring hope to your livelihood. Does your personal credit affect your chances of getting a loan to begin the business of your dreams? We will explore this question.
All lenders, especially local banks, will do a thorough check of your personal credit history. It most likely will affect your chances of receiving or being declined for a business loan.
You can increase your chances of receiving approval for a business loan by paying close attention to the following personal credit factors:
• Show a steady source of income. Changing jobs prior to or not having employment will decrease your chances. Lenders need to see stability.
• Credit card balances should be paid off or carried at low amount. Never cancel a credit card or apply for a new one prior to applying for a business loan.
• Obtain credit reports from all credit bureaus to check for accuracy. Almost half of the reports have been found to contain errors.
• Determine a manageable down payment amount. It may mean rejection or approval.
Lenders want to be assured the person they are loaning funds to is capable of managing personal finances because it will reflect spending habits within a business. Always be honest with lenders about your personal credit history. Click to continue »
