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How does my credit score impact my ability to get a small business loan?

Curious about Small Business Resources

How does my credit score impact my ability to get a small business loan?

Your credit score is an important factor that lenders consider when you apply for a small business loan. A credit score is a numerical representation of your creditworthiness and is based on your credit history. The higher your credit score, the more likely you are to be approved for a loan and receive favorable terms such as lower interest rates and higher loan amounts.

For small business loans, lenders typically look at both your personal and business credit scores. Your personal credit score reflects your personal credit history, while your business credit score reflects your business's creditworthiness.

If your credit score is low, it can negatively impact your ability to get approved for a small business loan. Lenders may view you as a highrisk borrower and may offer you less favorable loan terms or reject your application altogether.

It's important to check your credit score regularly and take steps to improve it if it's low. You can improve your credit score by paying bills on time, reducing credit card balances, and disputing any errors on your credit report. It may take some time to see improvement in your credit score, but it can make a significant difference in your ability to secure funding for your small business.

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