At some point in your working life, if you want to grow your business, you will really need to apply for a business loan to fund any expenses you may incur. For newly established businesses, they still don’t have a credit score at the start. Lenders will therefore look at your personal credit score to determine if you are creditworthy.

If you have a credit score of 650 or higher, your application will likely be approved. However, many business owners have low or bad credit scores, so they might find it difficult to apply for a loan, and therefore the possibility of expanding their business. With that in mind, here are a few options for improving your credit score when applying for a business loan.

Hire a professional

One of the best ways to improve your credit score is to seek professional help. This not only applies to business loans, but to all other loans. The reason for hiring a professional is that sometimes there are errors in your credit report that need to be addressed. An example of this is debts that are already paid, but the lender has not recorded them.

With the help of professionals, they can take action and file a dispute regarding the erroneous transaction. Not only that, but during the credit repair process you are assigned a team.

So if you have any concerns they can help you right away. It’s okay to be skeptical when hiring professionals. Companies like Credit Saint have a lot of reviews to make you feel comfortable with their services. You can read a Holy Credit Notice easily online as they are legitimate and have a good online presence.

Pay debts regularly

Paying debts regularly means paying them on or before the due date. Once you have paid your debts, it will record the deduction of your debts and your status as a borrower. Hence, improve your credit score every now and then. Besides, it’s a good idea that if you can already afford to pay off your debts, don’t wait too long to pay them off.

In addition, regular payment of your debts will play a vital role when you apply for a business loan. The reason is that when lenders such as banks take a look at your credit history and notice how you pay your bills religiously, there is a chance that you will be approved even with bad credit. Because sometimes lenders will think that even if you have huge debts, your payment history indicates that you are committed to paying off your debts, so they won’t hesitate to lend you.

Present a guarantee

One of the most effective ways to get a loan approved, even with bad credit, is to provide collateral. Providing collateral means pledging something to the lender such as insurance that you will pay what you owe. Truth be told, when you have collateral, lenders don’t look at your credit score or your credit history because you’ve already given them the assurance that you’ll pay.

Examples of collateral you can give as collateral are your personal assets, savings account, and accounts receivable invoices. But it would always be better to have collateral that you are comfortable with losing. The reason is that in the event that you cannot pay your debts, the lender has the power to repossess the item placed as collateral. So putting your car or the establishment itself as collateral is not a good idea.

Find a trusted co-signer

Another great solution to still get approved even with bad credit is to add a co-signer. Most of the time, lenders will accept co-signers who are members of your immediate family. Like you, the co-signer is obligated to assume the debt if you are not yet able to pay them. However, another qualification for a trusted cosigner is that he must have a good credit rating.

Keep in mind that the lender will not ask you to have a co-signer if they believe you can repay the loan or have a good credit history. But sometimes just to have extra insurance they require you to have a co-signer. So, if you surely know that you are eligible for the loan and you don’t need a co-signer, just stick with it to make the transaction go smoothly and build trust.

Don’t mix business and personal expenses

To improve your business credit score and have a good chance of qualifying for a business loan, keep them separate from your personal expenses. While lenders will review both your personal and business credit reports, it is still your business credit report that will weigh the most on loan eligibility. So you may want to separate these personal expenses or personal debts so as not to damage your business credit score.


There are many reasons why you might apply for a business loan; whether for expansion or unforeseen expenses. Now that you are armed with the ways to overcome bad credit, you will hopefully not let it stop you from growing your business to what it is meant to be.

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