A credit score is an important point taken into consideration while sanctioning a business loan. All loan lenders use credit scores to evaluate your creditworthiness.
The higher the credit score, the more financially sound individual you are considered. It never factors your personal information, like gender, religion, race, or national origin.
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All lenders check your credit score while processing your loan application. The following are the ways how your credit score will impact business loan application:
Your credit or CIBIL score is a 3-digit number indicating your capability to repay the debts and outstanding credit to the creditors. When you apply for a loan or file a debt application, the lender assess your credit score to judge your financial responsibility before approving the loan application.
It ranges between 300 and 900. It increases the chances of getting the debt or loan application sanctioned easily and quickly. In addition, it also improves the chances of getting the loan at better terms & conditions and a lower rate of interest.
A credit score is evaluated by the history of payments, the total amount an individual owes, the length of the credit history, and the types & numbers of new credits borrowed. Hence, it can be said that a credit track record is an essential consideration while approving a business loan application.
It is a wise decision to know your business loan credit score before you apply for a loan for business. It gives an insight into what the lender will think of you – it aids in lender’s decision whether he will approve the loan application or not. The best credit score to get the loan application approved is said to be 750, and it is more likely to strengthen your loan application.
