6 Easy Ways to Keep Your Credit Score Eligible for Business Loans
Business loans are availed for expansion and growth of the firm. In this era of technology you can easily project for a loan by following simple steps. Any bank or a financial institution only provides loans to their customers after checking their eligibility. It is important for the business owners to have a good Credit Score to avail the loan. A credit report reflects your financial soundness and your potential for the repayment of the loan. Banks need proof and trust before handing over the loan amount to you.
The higher the score of your credit report the easier it becomes for you to avail the loan. A good credit score assures the bank that you have enough capability to repay the loan within the stipulated time. You need to maintain a score of more than 750 for availing loan easily. Prior to that a score between 300 to 900 is asked by the bank for a business loan.
In this Blog we will discuss the methods by which you can maintain a fine credit score before to take a business loan for your firm.
Pay your Bills on Time
Maintaining a good report is not as hectic as you think. Just keep paying your EMI installments on time. Timely payment of your credit card bills and installments is very significant in getting you a loan. Paying your bills on time lets you get a fine score on the credit report. A poor credit history will be a biggest hurdle that will stop you from taking a loan so it is mandatory for you to pay the bills on time or before the time limit if possible.
Try to Maintain Low Credit Balance and Cash Flow
To keep your credit score stable you must aim to keep your credit score balance as minimum as possible. The thumb rule says that you should utilize upto 30 % of the credit given to you. This limitation is different for different banks. Spending more than the limit can affect your capacity for the credit to withdraw and your score. Another good practice is to repay the amount taken before the dates or further withdrawals. This is the most neglected point that is to be considered before taking a loan. Many business owners omit to look down the cash they have to repay the loan amount. Banks before giving you a loan take a look at the cash flow of your business.
Prevent Cancelling Old Cards
The old credit cards of the customers carry a lot of information along with them about the customer. If you own an old credit card it reflects that you have potential to repay the credit amount. Once you cancel an old credit card it erases all the history and information along with it. Information once deleted cannot be retrieved. There is no regret in keeping an old keeping a credit unless it creates a negative impact.
Keep a Check on your Credit Report and Business Plans
A regular check of your credit report enables you to find the palace you are lacking or committing mistakes in keeping a good credit report. There are many points that spoil your credit report like negative customer feedback, huge withdrawals, loan defaults, multiple credit accounts, and negative cash flows or bounced cheques. While looking at the report you must look for the cause of the red flags that appeared and make it a bad report.The banks ask you the purpose of taking the loan and if you fail to tell the reason or the plan if may be a reason for a red flag on your credit report.
Availing Short Term Loans
In order to make your credit history report stable you can take short term loan business loans. Short term business loans are not hectic and can be repaid on time or before time. These types of loans are mostly availed to build a good credit report. Short term business loans can be used further to expand and grow your business. Business loans apart adding value to the credit report also provide a cushion for a business owner to risk the market demands without worrying about the future.
Multiple Loan Applications
When you apply for a loan from many banks and send applications to all it creates a negative image of yours in front of the money lending banks and financial institutions. Try to approach as minimum as possible while you are thinking of taking a loan from outside. Sending continuous applications makes the lender feel that you are extremely low with the funds and will be unable to repay the loan. Business owners think that too many applications gives them more and more opportunities to grab a loan from different banks.
Try to keep in mind the above discussed points, they help you build a fine credit report. Here at powercash. co. in, we check your eligibility for the loan within a few seconds. Just visit our website and avail the loan to expand your business. Power is one of the leading names in the loan market. We provide you with the best financial services and assist you in growing your business with us. Our low interest rates makes us and high quality service makes us ahead of our competitors.