Crucial Factors Affecting Your Credit When Applying for a Loan: Understanding the Impacts on Your Credit Score
Your personal credit history and business history are crucial elements of your small business’s profile. They affect whether you qualify for a business loan, line of credit, commercial lending, or other credit products. They also determine what kinds of rates and terms you are offered. It’s general understanding that your payment history influences your credit, but occasionally applying for funding can impact your credit, too.
When does applying for business funding affect your credit? What parts of the process negatively affect it? Learn the distinction, and what actions to take for a smooth business funding process.
Prequalifying for a loan
The prequalifying process, is when you provide all your basic personal & business information, during this process lender normally pull do a soft pull on your credit. A soft pull does not affect your credit score. It’s always good to shop around for your lending options prior to making any commitments.
What is a soft pull? A soft pull occurs when you or a lender checks your credit score. Typically, lenders do a soft pull to verify your credit score matches what you put on your application and to see if you meet their minimum credit qualifications.
Applying for a business loan
Before a lender can complete your application, they will conduct a hard pull on your credit to examine your credit report deeper and take the potential affect of the new debt into consideration. While a hard pull doesn’t affect your credit the change is minor, and only occurs after you have qualified for the business funding offered and are in the final stages of the application.
Applying for business funding with ease
Tax-Keeping By AC has many traditional and private lending partners. We guide you through the process ensuring you understand each step, accumulate all the documents necessary to qualify, and negotiate and shop the best terms for our business funding clients. If you are ready to get started with obtaining a loan, credit card, or line of credit for you business schedule your free Funding Consult now!