Find out your credit score
Being able to free up new capital is important to all consumers, but it is especially important for those who want to start, expand or otherwise finance their business ventures. But banks don't lend money to just anybody. Instead, they need to know that the borrower has demonstrated an ability to pay back loans in the past, and can be trusted to do so again. The way banks make this judgment is by analyzing an individual's credit reports and credit score, statistics that grade a person on the likelihood that they will be able to repay a loan.
If a credit score is low, then a credit report will tell the bank not to loan that individual money. This can be a frustrating circumstance for a struggling business owner or hopeful entrepreneur. Sometimes the solution for someone with less than pristine credit history—or, in some cases, no established credit history at all—is to have someone with good credit co-sign for the loan. Knowing if a loan is likely to be secured can be as simple as viewing a free credit report online.
How to Get a Credit Report
A loan application goes through credit report companies called credit bureaus, which use the name on the application to arrive at a credit score. This score is comprised of data that past lenders and creditors submit to credit bureaus. The credit bureau evaluates the information and compiles a credit report, which the lender will use to justify their decision to grant or deny a loan.
Predicting Your Credit Score
There are ways to predict what your credit score will be. If you have missed payments on purchases in the past, such as on your personal or business credit card, it is possible you have a poor credit score. Improving that credit score means taking on more debt and then making regular payments, demonstrating to creditors that you are capable of repaying a debt. If a lender sees that you have met consumer debt obligations on a regular basis, there is a better chance they will approve a loan. Free credit reports, including online credit reports, are always available.