05/22/2013– Credit Scores Are Not Created Equal For Business Owners

There is a free website where you can obtain your scores once a year. Having this information, you can now gain access to your credit report. This data is important to know especially if applying for credit cards or a loan (personal, business or otherwise).

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Having now received your credit report from the Big Three (TransUnion, Equifax and Experian), you think you now know where you stand in the credit score ranking and march forth to apply for monetary funding. The surprise comes when, expecting a good rate and easy funding , you are quoted a much higher rate or even get turned down. How could this happen?

Unfortunately, this happens because, as the title implies, not all credit scores are created equal. The scores you receive from the Big Three and even AnnualCreditReport.com , are not necessarily the scores that are used by financial institutions. The scores sold by the abovementioned companies are called "educational" scores and are meant only to give you an idea of where you stand. The information which is the basis of these scores may not be that used by a lending institution when considering a loan application.

Here's how the difference between the score you have and the one your bank uses can cost you money. If the score leads you to believe your credit is not good, you may settle for accepting a loan at a higher interest rate, even if you qualify for a lower one.

Conversely, if you are overconfident about a "good" score, you could waste time and money applying for loans for which you don't qualify. You could even end up dinging your credit more, because, each time you apply for a loan, these inquiries appear on your report.

Fortunately, because of the financial reform bill, anyone turned down for a loan will receive a free copy of the score they used to evaluate your credit worthiness. They are also required to explain the factors that affected your score and show where it falls on the range of possible credit scores.

To get a more accurate idea of what your lenders will see, order a free credit report. This is the same information your bank sees, if not the same score. Make sure everything on your report is accurate. If you decide to buy a score buy a FICO score, which is the one that the majority of lenders use.

If you are still concerned about your credit score and you should be concern as much to your business credit score if you are a business owners. Most small businesses don't have business credit as they don't have a lot of trade-lines so personal credit of the owner is the determining factor when deciding for credit such as equipment lease, business loans, working capital loans or merchant cash advance factoring for that matter.

Law requires TransUnion, Equifax and Experian to give free credit report after you have applied for credit or insurance within 30 days of inquiry.

When bank financing is no longer a solution, Liberty Capital is ready to help. We help identify your business needs with a no-cost analysis. We then work with you to secure your loan. We bring the whole package to you with a minimal effort on your part.

If you are a business owner with good credit score , that is just half of it. When applying for credit, such as business loans, you are not only required to have good credit score, but you must have cash flow, collateral, cash and asset. What if you have bad or poor credit and you have cash, asset, collateral and cash flow, will the bank still approve you? Perhaps, maybe, but common sense will dictate that it will not be easy. Therefore, if you are a business owners having good personal credit doesn't guarantee instant credit. But for personal borrowing almost guarantee credit. Not for small business owners, it's not guarantee.