Unsecured Business Loans: Prepare your Credit

Many business owners use their cars and homes as collateral to take out personal loans when they begin their business. This can lead to some serious financial issues. An unsecured loan that is tailored for businesses can be a much better option. An unsecured loan, however, has strict qualification requirements. Your credit score is a big part of this. Start ahead of time to get it ready.

Obtain your Score

Before you begin applications for Unsecured Business Loans, take the time to check your credit score. This way you know what you are working with. Even if your score has recently improved, you may have collections or missed payments that show on your report. A lender sees these issues as inconsistent payments. Even if you get approved, your interest rate may be extremely high. You can dispute collections or pay them off to have them removed. Missed credit card or car loan payments can weigh heavily on your score. Make your current payments a priority, and make proper arrangements when you are running late.

Hire Help

If you score is incredibly low, it may be best to wait before you apply. There are credit repair companies that can help you get your score under control faster than you can do it on your own. They can often dispute several collections accounts at once. They can also look over your history and get an idea of what patterns a lender may look at. They can help you make changes that present you as less of a risk.

Credit Cards

Credit cards can raise your credit score incredibly fast. If you have cards, pay them down so that you are using 30 percent or less of your available credit. If you do not have cards, apply for a secured card to get your credit moving. You have to show revolving credit for your credit score to change. Be sure to use the card for something small each month. Pay the bill on time or early. A good report to the credit agencies each month adds points on a regular basis.

Sign up for Credit Monitoring

There are several free credit monitoring services. The scores that show on these are not always completely accurate, however, they are usually pretty close. These services detect even small changes on your credit report and notify you. You can check daily to see what you need to work on and what has changed for the better.

Your credit is going to be the main factor used for consideration of a loan that is unsecured. Start ahead of time to prepare your credit report. Some changes take time. You may have to wait on the results from disputes or to get your new credit card started. If you need to work faster, hire a reputable repair agency. When your credit is ready, your loan application should be easily approved.