Credit Score 101

Last Updated on November 4, 2015

Everyone who has ever applied for a loan knows the term credit score. The team at National Business Capital & Services 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 as their prospective lender.

credit score 101

What is a FICO 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 is a Good Credit Score for Business Financing?

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 Do You 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. A low credit score is not a loan disqualification at National. 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.

Need Help Getting Approved for Business Funding with Low Credit?

Fill out our 1-minute application online, or call us at (877) 482-3008, and we’ll find the perfect bad credit business loan in the marketplace for you, and get you the funds your business needs in as little as 24 hours through our simplified approval process that does not depend on your FICO score!

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!

About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.