Keeping a good credit score is something that any growing or established business should seek to do. A good credit score not only increases your loan limit, but it also attracts numerous loan opportunities from various licensed moneylenders. However, keeping a good credit score can be a hard task for any business enterprise due to small mistakes made by business owners.
Here are a few ways you can get started financing your business without hurting your credit score.
1. Research the Options Available To You
Did you know that making credit inquiries could lower your credit scores? One way to reduce such inquires is to identify the various options. Not all business loans are equal or have similar terms. Therefore, looking into various types of loans is an essential step towards finding a suitable loan option. You should see which consolidation loan in Singapore that your business best qualifies before making any inquiries. Smart borrowers take their time to research their options before choosing a suitable licensed moneylender.
2. Narrow Down Your Options
Once you have an understanding of the type of loan your business qualifies for, you can narrow down your options. To avoid a situation where every licensed moneylender looks into your credit score, you can generate inquiries only from licensed moneylenders that are likely to approve your loan application. As there are many different licensed moneylenders in Singapore, the right research not only narrows down your selections but also reduces the chances of making too many inquiries, therefore hurting your credit score.
3. Use Your Credit Profile to Choose A Licensed Moneylender
Your credit profile plays a significant role in whether or not your business loan will be approved. If your credit score is high, your business will attract low-interest rates from reputable licensed moneylenders in the country. If you have a bad credit score, getting a quick loan approval from a reputable banking institution in Singapore can be much more difficult. This is not to say that you should obtain a monthly instalment loan in Singapore or an easy cash loan, but you can still find new lending institutions that are seeking to increase their market base. Such institutions may be ready to give you a loan despite your bad credit score.
4. Avoid Canceling an Already Applied Loan
Before granting you a loan, any financial institution in Singapore will do a hard credit check on your credit profile. Cancelling an approved loan in the name of opting for a cheaper loan option with a different institution can impact your credit score negatively. Therefore, once a loan has been approved, you should accept it even if a better option is found elsewhere. However, you should do all the proper research that you can before making the major decision of choosing your banking institution.
Navigating to the top of the business sphere without jeopardizing your credit score is not easy, especially for small businesses. Having an understanding of how credit score works and the available funding options for your business ensures that you will be able to receive a suitable loan for your business. Keeping a good credit score for your business is an essential factor when planning for proper financial security.