Long gone are the days when a good personal credit score and a quick application could get your business a six-figure loan in the same day. After all the damage done to banks from approving way too many loans all across the board, the process has changed significantly. You should be aware of these changes.
For one thing, your business credit score is not used very much at all when assessing you for approval of a business loan. Your creditors submit the information on this report voluntarily, but it just doesn’t paint a clear enough picture of your credit worthiness. Instead, the bank will need to look over your personal credit report.
When reviewing your personal credit report, they won’t just be looking at the score. They’ll also be diving in to see the information that it contains. Do you have a history of occasionally missing payments? Do you ever miss any of your major bills, such as your house payments? Those things will be seen as bad signs. Your character and likelihood to repay will be brought into question.
So, make sure to keep your personal credit report as clean as possible if you are looking to get funding for your company in the near future. At least 6 months before you are going to try to get funding, you should pull your report from the three major credit bureaus to see if there are any obvious errors. If so, you should begin the dispute process immediately.