It is very important to have a good credit score when applying for a small business line of credit. Or an unsecured personal loan or a small business loan.
That said, having a bad credit score can hurt you in every area of your life , not just when you are trying to secure a credit card, a mortgage, or even an unsecured business loan.
For instance, employers in many circumstances can and will perform credit checks on job seekers, and your low credit score score might be the deciding factor in qualifying for the job you applied for or if it would go to a similarly- an experienced candidate with a better credit score.
If you want to purchase a home, or buy or lease a vehicle, or simply purchase a new cell phone -- you guessed it -- a bad credit score could hurt your chances.
What Will Hurt Your Credit Score?
Maxing out your credit cards and lines of credit - try not to borrow any more than fifty percent of your credit maximum. If you go over that, it will damage your credit rating. Bottom line, never use your credit cards to the limit.
Late payments - late payments are really devastating to your current credit scores. Repayment history makes up about 35 percent of your credit score. So that you can make certain that you will not neglect a payment, go on autopilot - set up to have all or most of your main monthly payments withdrawn automatically from your bank account. That way you will never have to be troubled that your payment has been made on time.
Applying for a lot of credit cards or loans - applying for more than a few cards is usually a warning indicator to financial institutions (if you're going to apply for more than one credit card, it has been suggested you implement it all in one particular day).
Closing down old credit card accounts - loan companies want to look at a long repayment track record. The more time you have a credit card account open and have made on time installments, the more this improves your credit rating.
Having a tax lien .
Declaring bankruptcy.
What's A Decent Credit Score?
Anything higher than 700 is normally perceived as excellent.
600 to 690s - okay, yet not ideal. These times, with tightening borrowing conditions, might possibly not be enough to get you approved and certainly not for the ideal rates and terms.
Less than 600 - you are considered a high credit risk.
Beneath 550 - you are considered an extremely a bad credit risk.
Overall, prior to things getting so bad - confer with a consumer advocacy lawyer and negotiate with your creditors. This can save you from a disastrous credit score which often hurts you for up to a decade.
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