If you own a business, then you understand the importance of credit scores. Whether you want to get a commercial loan, work with a new vendor, lease new office space or buy equipment, your credit score will become a factor. Understanding the way credit scores work in terms of the various ranges, will allow you to gain a better overall picture of where you stand and potentially what you may need to do to work on bringing that credit score up.
If you have an Excellent credit score, then you're certainly in a great position, especially if you're interested in taking out a short term loan or line of credit. Essentially a 750 or above indicates that you are current on all your debt and loans. That you've maintained at least 3 years worth of on-time payments, and that your credit usage is right where it needs to be, meaning not too high.
For those with a Good credit score, you too are prompt in terms of making those credit card and installment loan payments. The differentiating factor here is that you may have some balances which are a little on the high side.
With a Fair credit score, there are probably some higher balances involved, as well as a few too many open accounts. Also, if you fall into the Fair range, it is likely that your credit history does have several delinquencies on it.
Having a Poor credit score means that you currently have delinquencies and you may be maxed out on more than one credit card. Here too, there could be collections actions against you and perhaps even bankruptcy on record.
Bad: 549 and below
You have a consistent record of nonpayment along with potentially foreclosures, a bankruptcy perhaps and even a series of collections against you.
If you aren't necessarily in the Good or Excellent categories, you still may have a chance of receiving business funding. At First Union, we work with companies who may not have the best scores and yet the overall picture looks promising. If you're in need of working capital don't hesitate to give us a call, regardless of credit score—we're here to help!