Does My Personal Credit Score Affect My Business?
Where credit is concerned, it is always good to just tackle the matter as it is. So yes, any service or business credit card you own through your firm can negatively affect your business, especially if it is low. However, if it is good it positively affects the business. There is however ways some people are able to keep their personal credit scores away from the credit scores of their business which has worked as well.
In applying for loans, some financial institutions make sure they ask for and check both your personal and business credit scores. If your personal credit score is bad, but your business credit score good, you might have to deal with some delays. There are different forms of delays that you get to suffer with a bad credit especially in applying for loans.
Bad personal credit score effects
The effects of a bad personal credit score will not affect your personal loan application; it will also make the lending financial institution feel you are in need of personal cash which is why you are applying for the loan. If you apply for a business loan with your business credit score and the lender finds out about your personal loan, you end up at the losing end. This is because these lenders will feel you need the money to fix personal issues and if the score is very low, you might be asked to provide a collateral or you might be given the loan with very high interest rates.
Good personal credit score effects
There is nothing as exciting as having a good personal credit score. This can open many doors for you especially in applying for loans. Just imagine having the best personal credit score and also the best business score. Well, with these two amazing credit scores; you get to benefit a lot from low interest loans. Also, the chance for you to get a loan approval is much higher.
Knowing about interest rates
There are many different reasons why interest rates can be increased or reduced. One of them has to do with personal credit record. When interest rates are high, you will realize that it is because the borrower has no collateral and has bad personal credit, etc. However, the best interest rates come when you have the best personal credit scores. Have credit scores that are good personally and for your business is very important and makes loan application and granting very easy.
Option for people with not to flawless credit history
Banks also require applicants to have a flawless credit history when it comes to loans application. However, having a low credit score does not mean you have no chance in getting a loan. There are some lenders do not only assess the risk based on your credit score. They will also look into other factors like your current income status or your future development plan. For example, Max Funding is a bank alternative lender that specialises in providing bad credit business loans with competitive interest rate and flexible payment options to SMEs.