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.
Having a bad credit score can hurt you in other areas of your life as well, not just when trying to find a credit card, a home mortgage, or even an unsecured business loan.
For instance, employers often times will run credit checks on job applicants, and a bad credit score might be the determining element in getting the employment you applied for or if it goes to an equally- a skilled candidate with a better credit rating.
To rent a home, or buy or lease a car, or even buy a new cell phone -- you guessed it -- a bad credit score will probably harm you.
What Will Hurt Your Credit Report?
Maxing out your credit cards - try not to borrow more than 50 percent of your credit maximum. If you go above this amount, it will probably hurt your credit score. Bottom line, never charge your cards to the limit.
Late payments - past due monthly payments will be disastrous to your credit rating. Payment history makes up about thirty five percent of your credit rating. In order to make sure that you do not skip a payment, go on cruise control -- arrange to have all of your payments withdrawn automatically from your bank account. In this way, you under no circumstances have to worry that the check is in the mail.
Applying for a bunch of credit cards or loans - making an application to a number of cards is a warning sign to loan companies (if you're going to make an application for more than just one card, it has been recommended you do so all on one day).
Closing down old credit card accounts - banking institutions really want to observe a lengthy payment background. The longer you have a credit card account available and also have made on-time payments, the more this helps your credit .
Having a tax lien .
Declaring bankruptcy.
So, What Is Actually A Good Credit Score?
Anything above 700 is regarded as excellent.
600 to 690s - okay, but in no way best. These days, due to tightening credit requirements, might not be enough to get you approval and without doubt not for the best rates .
Below 600 - you're considered a high credit risk.
Below 550 - you are really thought of as a very a bad credit risk.
Overall, before things get so bad - check with a consumer advocacy attorney and negotiate with your creditors. This can save you from a terrible credit rating which hurts you for up to a decade.
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