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Why Credit Score is Important for Business Loan?



A business requires an inflow of capital and funds from time to time for working capital, operating expenses, buying equipment and machines, and expanding the business.

The requirements can be fulfilled by getting business loans from banks, financial institutions, NBFCs, and open markets.

However, getting the business loan is not very easy, the business has to be eligible based on various criteria such as the annual turnover, income tax return, banking, credit history, out of which the most important criteria are the credit history of the business that is being determined by the CIBIL score.

In this blog, we will get to know about the importance of cibil score for business loan.

What is a Credit Score?

A credit score is a number accredited to the business, based on the study of their credit history that includes their business credit card usage, bank accounts held & closed, payment history and the credit enquires done by the business.

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Where Can the Businesses Check their Credit Score?

There are credit bureaus licensed by RBI, that provides credit scores in India. The popular bureaus are Equifax, Highmark, Experian that assigns the credit score.

Also Read: What Is A CIBIL Score & How Does It Affect Your business?

What is a Good Credit Score?

The credit score popularly known as CIBIL ranges between 300 and 900, where 900 is the best score and 300 is the poor score. This can be explained with the credit score range as shown below:

credit score

0 or -1

350 – 550550 – 650650-750

750 – 900

In case there is no loan or credit card then no credit history is created and the score will be zero.Considered to be a bad score. This is caused by the regular defaults in the payment and as a result, the chances of getting the credit is low.This range signifies that the businesses are regular with their payments. Hence, there are chances of getting fresh loans and credit cards.This range is the safe zone and there is a high possibility of getting a loan based on current payment habits.This is the best range and the applicant sure-shot gets the loan based on good credit history.

Why is It Important to Have A Good Credit Score?

  • It is a mandate for the majority of the financial institution to have a look at the borrower’s credit score before deciding to provide a loan or credit card.
  • It can be also asked by the companies from where a person is availing services such as l utility organization, service industries, etc.
  • Credit score can also be asked by the prospective employer as a part of the background verification procedure before offering a job.
  • A good credit score helps the borrower to get the loan at a cheaper rate of interest.
  • In a few cases, Bank checks the credit score before opening the bank account

How to Avail of A Loan if a Person Has A Bad Credit Score?

The cause for the bad credit score is missing out on credit card dues, defaulting of the Loan EMIs repayment, which reduces the chances for the borrower to get a business loan. Albeit there is still a solution to tackle this issue which are:

Line of Credit Option

It is easier to get a business credit card than applying for a loan, as per the past payment record the credit limit is being decided but the credit is majorly received at a higher rate of interest.


Majorly banks do not provide business loans to individuals with a bad credit score. However, in certain exceptional cases, it might provide a business loan at a higher rate of interest.

Such a scenario is can be explained with an example, if you have a fixed deposit in a certain bank then the bank can provide you a loan against the amount deposited as a fixed deposit.

Non-Banking Financial Corporations

Popularly called NBFC, the criteria for a credit score is not very stringent for the borrowers to avail of a business loan. As the majority of them provide an unsecured loan, hence the rate of interest charged is high and the borrowers can borrow a higher loan amount.

One of the popular NBFC, ZipLoan can provide unsecured business loan up to 7.5 lakhs, at a very competitive interest rate even at the lower credit score if the business suffices other parameters.

Loans with Security

Persons can avail of a business loan in a bad credit situation if they have assets such as a house or business property, machinery, equipment, etc that they can mortgage with the banks. Such loans are also available at a lower rate of interest.

Loan on Future Revenue

The agreement is made between the borrower and the financial institution where the business loan amount is provided as expected by the borrower and a certain percentage of the monthly revenue is being deducted and paid as an EMI till the full amount is being paid. There is a condition that the loan cannot exceed more than 10% of the company’s total revenue.

Loans for Small Scale Companies

These type of loans help the budding small scale startups to acquire loans from non-profit organizations. The loans are provided at a decent rate for a good tenure.

In case, the borrower has a bad credit score, he/she should start improving the score so that he/she becomes eligible to get a desired business loan amount

Also Read: Improve your CIBIL Score in 7 Guaranteed Ways

What Are the Ways to Maintain the Credit Score?

  • Use a credit card but limit yourself to 40% of the credit limit.
  • Repay the credit card dues and EMIs on time.
  • Control enquires and application for the new loans or new card.
  • Continue using an old credit card, the closing of the card will reduce the credit score from a few points.
  • Existing debt to be managed – Too much debt can impact your credit score.

Maintaining a good credit score health, result in getting a higher amount of business loan that will serve the purpose for which the business loan is being taken. So it becomes imperative for businesses to improve their credit score to get a business loan from different sources.

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ASK THE MONEY LADY: What you need to know about protecting your credit score | Regional-Lifestyles | Lifestyles



Dear Greg,

Most people never want to share their social insurance number for fear of a hit to their credit bureau, but unfortunately, you may find it a necessity when asked by your lender, who now needs to ensure identity due to increased consumer fraud.

If you apply for credit at a bank, open a bank account or finance a vehicle, chances are you will need to disclose your social insurance number (SIN).

Many people still believe that they should never agree to an inquiry or give out their SIN number too many times to obtain credit. They think their credit will either become damaged or their credit bureau rating and score will go down. This is sometimes not true – so to help you out, Greg, I’m going to dispel all the myths and also let you know what the banks are looking for.

There are two major credit bureau companies that all financial institutions and merchants use today. They are Equifax and TransCanada Union – agencies that rank and provide an overall score to each person who uses credit.

The system for measuring hits to your credit score is indeed intuitive, meaning it measures and evaluates the type of merchant and inquiry. So, it knows if you are shopping around. If you have several inquiries from different banks because you are rate shopping for a mortgage, you will usually not see any decline in your score, (however, these inquiries must be contained within a 30-day period).

It’s the same thing when you are shopping for a vehicle – multiple hits to your credit bureau from car dealers will not alter the score if contained within 30 days.

But, on the other hand, if you are truly shopping and going to different stores, applying for multiple credit cards, personal and retail loans, or buying items on deferred payment plans, then yes, this will drop your score regardless of the 30-day limit.

Protect your credit

First and foremost, you want to protect your credit. This is the foundation of all lending and is the only way for lenders to judge your creditworthiness for the future. If you always pay your bills on time and have never declared bankruptcy, chances are you will have good credit.

But if you are the opposite, and your credit score is too low, you may find it very difficult to get future credit. Your credit bureau score can range from 300 to 900.

As a general guideline, banks and A-Lenders are looking for clients with scores above 680 and will generally automatically decline applications with scores under 600. Credit card companies are a little more lenient and will go down as low as 530, with auto declines for scores under 500.

Here are some tips to improve your credit and maintain a good rating:

1. Pay your bills two to three days before they are due. Paying them on the due date (especially through online banking) will make you one to two days late. This is recorded on your credit bureau and will definitely lower your score without you knowing it.

2. Do not carry balances on credit cards or personal loans month over month. This means your credit is revolving and will automatically drop your score.

3. Resist the urge to have a lot of open credit cards, even if they have zero balances.

4. You must have some credit. If you had previous bad credit and now are just using cash, you are essentially handcuffing your future. Without re-establishing good credit, the banks will decline you every time.

5. Property taxes and support payments in arrears can also drop your score once they are reported.

6. Mortgage and vehicle payments in arrears once reported (which usually happens after 60 days), are a major hit to your score. Please try to avoid this.

I have heard in the past that some merchants or banks do soft hits to your credit. Please do not get fooled by this. There is no such thing as a “soft hit” or a “hard hit” to your credit bureau. If they have your verbal consent, (even if they don’t have your SIN number) when they adjudicate a consumer credit request, they will hit your credit and it will adjust your score.

Good luck and best wishes,

Christine Ibbotson

Written by Christine Ibbotson, author of four finance books, including the Canadian best-selling book, “How to Retire Debt-Free & Wealthy.” Go to or send a question to i[email protected]


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Bad Credit Credit Cards – Bad Credit Credit Cards – ‘My refund has been sent to a credit card that I cancelled’ – your rights to lost money | Fintech Zoom | Fintech Zoom




Bad Credit Credit Cards – Bad Credit Credit Cards – ‘My refund has been sent to a credit card that I cancelled’ – your rights to lost money | Fintech Zoom

Bad Credit Credit Cards – ‘My refund has been sent to a credit card that I cancelled’ – your rights to lost money

Thanks to Covid, traders have been processing significant numbers of refunds due to events, such as holidays and weddings, being cancelled.

In many cases, these refunds have been sent back to the credit cards used to pay for the purchase – but this has caused a new problem to emerge in relation to card purchases.

When a trader provides a refund, it usually goes back via the same method as the original payment. So if you pay by credit card, the refund is sent back to that card.

However, many people have cancelled credit cards during the pandemic and have therefore found they cannot access the cash.

So what happens to your refund?

Will I get my money back?

If you’ve cancelled the card, the money will be sent to a holding account

The good news is that your refund is safe, as the money will simply be put into a holding ­account by the card provider.

The bad news is that it can take a long time to retrieve the money.

My advice, if you’re waiting for a refund for goods or services you paid for with a card you have now cancelled, tell the trader immediately and ask for the refund to be paid via an alternative method.

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Positive balance credit card accounts

When a refund is processed back to a card, it can create a positive balance on your account – usually when you have already paid the most recent card bill.

This potentially presents issues as credit cards are not designed to ‘hold’ money in the same way as a current or savings account.

For this reason, consumers are not encouraged to hold positive balances on a credit card.

If your card has a positive balance and you are likely to use it again soon, your next purchases will rectify the situation.

But if you are not planning to use your credit card again in the short-term, ask the card company to transfer the surplus to your ­current account. Do not withdraw the money via an ATM as this may attract fees.

Credit card cash withdrawals

Financial experts warn that you should not get money out from a credit card as it can have a major impact on your credit rating.

This is because there is a very high interest rate attached to withdrawals and companies will flag any withdrawals up, impacting a customer’s credit file.

Bad Credit Credit Cards – ‘My refund has been sent to a credit card that I cancelled’ – your rights to lost money

Bad Credit Credit Cards – Bad Credit Credit Cards – ‘My refund has been sent to a credit card that I cancelled’ – your rights to lost money | Fintech Zoom

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Workout My Credit Solutions Rises as an Authority in Credit Repair and Financial Education



Quality of life is impacted by numerous factors, and one of its most significant determinants is a person’s financial health. For the most part, financial stability involves the ability to provide for themselves or their family members without putting a significant dent in their wallets. As a concept, financial stability as well as financial freedom is easy to understand but achieving and maintaining it is a whole new story. Today, millions of individuals around the world are struggling with money issues, some of which are caused by the outbreak of COVID-19. However, there are those contending with bad credit, in particular, as a result of ill-informed decisions, mismanagement, and more. Widely acclaimed for the extent to which it helps clients get their credit into shape, Workout My Credit Solutions, LLC has emerged as a go-to venture that is currently making waves in the industry.

Also Read | Top 9 Upcoming Credit Repair Companies

This emerging powerhouse was launched by Nicole Fisher, a 25-year-old serial entrepreneur who has earned recognition for her all-out attitude toward lending people a hand through her initiatives. Highly cognizant of the impact of bad credit on one’s financial health, she started Workout My Credit Solutions in May 2020 and, since then, has been making it possible for clients to get approved for credit cards, mortgage loans, and auto loans, to name a few.

In just a year, the credit repair company has seen impressive growth, reaching remarkable heights due to its consistent delivery of top-notch services. Apart from restoring one’s credit into its former glory, Workout My Credit Solutions also delivers financial education because it believes in the importance of equipping clients with the knowledge they need to handle their money better. It acknowledges the existing gaps in the current educational system where ample attention is not given to arming people with the skills they need to secure a financially stable future. “Our goal is to help clients understand how credit works while they are in the process of getting it fixed,” shares Nicole Fisher.

Also Read | Top 9 Upcoming Credit Repair Companies

Additionally, Workout My Credit Solutions, under the leadership of Nicole Fisher, enables clients to get pre-approved mortgage loans after having their credit repaired by this five-star company. The additional service is strategically designed and incorporated into its inventory of offerings to translate into reality the dreams of those wishing to own a home.

On track to taking center stage, Workout My Credit Solutions has been on the receiving end of excellent reviews from everyone who has come under its wing. It takes pride in the long list of accomplishments it managed to snag under its belt shortly after its establishment and is set to reach the forefront of the industry in the coming years.

With its dedication to pushing people toward financial freedom, Workout My Credit Solutions is bound to remain an impressive force. As it carves a path toward the summit, it plans to continue serving as a leading authority in credit repair and financial education.

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