If you can’t get business financing, you’ll have to rely on personal savings, a personal credit card, home equity or another method of financing. Having a good business credit score makes it easier to get business financing. Why Is a Business Credit Score Important? The only requirement is that the business has suppliers, vendors and lenders who regularly report account activity to a business credit bureau. When a business owner needs to take out a loan or open a line of credit, the lender or service provider will typically check both their personal and business credit score to determine their eligibility.Īny type of business can have a business credit score, from a sole proprietorship to a corporation with thousands of employees. A business credit score functions the same way. When a consumer applies for credit, the lender will pull their credit score to determine if they’re a responsible borrower. We’ll take a look at how a business credit score is constructed, the importance of a high score and what you can do to make sure your business has a strong credit profile. While a business credit score is similar to a personal credit score, there are some key differences in how the score is put together. What you might not realize is that businesses need to do the same. "You're already hitting that pinnacle of what care about." A high enough credit score shows lenders and credit card issuers that you are less of a risk and more likely to pay back the loan, versus if you had a lower credit score.As a consumer, you’re likely familiar with the importance of building and maintaining a good personal credit score. "If you're above 760, or 780, certainly you're already getting the best you can get," Droske tells Select. Anything higher, though, won't be more beneficial, nor would it get you a better offer with more favorable terms. But he says aiming for 780 is even better to be "the safest" in any type of lending situation. That way, they're safe for all loan types and cards."įor Jim Droske, president of the credit counseling company Illinois Credit Services (and someone who actually has a perfect credit score of 850), the threshold is 760 as well. "As such, I always tell people, shoot for 760 or better. "The best published interest rates for auto loans are 720+ and for mortgages 760+," financial expert John Ulzheimer, formerly of FICO and Equifax, tells Select. However, it comes with no additional benefits that you likely won't already get with a 760 score. It might be exciting for some to aim to achieve the highest credit score of 850. Investing +More All Investing Best IRA Accounts Best Roth IRA Accounts Best Investing Apps Best Free Stock Trading Platforms Best Robo-Advisors Index Funds Mutual Funds ETFs Bonds Help for Low Credit Scores +More All Help for Low Credit Scores Best Credit Cards for Bad Credit Best Personal Loans for Bad Credit Best Debt Consolidation Loans for Bad Credit Personal Loans if You Don't Have Credit Best Credit Cards for Building Credit Personal Loans for 580 Credit Score Lower Personal Loans for 670 Credit Score or Lower Best Mortgages for Bad Credit Best Hardship Loans How to Boost Your Credit Score Taxes +More All Taxes Best Tax Software Best Tax Software for Small Businesses Tax Refunds Small Business +More All Small Business Best Small Business Savings Accounts Best Small Business Checking Accounts Best Credit Cards for Small Business Best Small Business Loans Best Tax Software for Small Business Personal Finance +More All Personal Finance Best Budgeting Apps Best Expense Tracker Apps Best Money Transfer Apps Best Resale Apps and Sites Buy Now Pay Later (BNPL) Apps Best Debt Relief
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