{"id":1339,"date":"2019-09-09T06:09:31","date_gmt":"2019-09-09T06:09:31","guid":{"rendered":"https:\/\/bizzloans.com.au\/?p=1339"},"modified":"2022-10-27T06:01:09","modified_gmt":"2022-10-27T06:01:09","slug":"how-a-business-loan-can-affect-your-credit-score","status":"publish","type":"post","link":"https:\/\/bizzloans.com.au\/how-a-business-loan-can-affect-your-credit-score\/","title":{"rendered":"How a Business Loan Can Affect Your Credit Score"},"content":{"rendered":"

You might have heard of horror stories from people who were shopping around for loans, and then it took a big hit on their credit score. There\u2019s nothing wrong with looking around and <\/span>comparing loan options that best fit your business<\/b><\/a>. However, it pays to know what you\u2019ll be dealing with when you start going through the loan application process. Here\u2019s how credit checks can impact your credit score and what strategies you can use to prevent losing points.<\/span><\/p>\n

When Does Applying For Loans Affect Your Credit Score<\/b><\/h3>\n

The health of your finances (which is in this case, your credit score) will affect your chances of getting a business loan. The opposite is true as well. When you shop around for loans and take on financing, it can also affect your credit score. If you\u2019re not aware of the impact that applying for loans will make on your credit score, chances are you\u2019ll unnecessarily lose points. It will also hinder you from getting the best loan rates. <\/span><\/p>\n

Here\u2019s how you can meander through this system of hard and soft credit pulls to prevent negatively affecting your score. <\/span><\/p>\n

How Credit Checks Affect Your Credit Score<\/b><\/h3>\n

The following are the types of credit checks that lenders would usually do when you apply for a loan.<\/span><\/p>\n

Soft Inquiry:<\/b> Lenders will make a \u201csoft inquiry\u201d on your credit report when you are seeking for pre-approval or an initial rate quote. Soft inquiries do not impact your credit score. <\/span><\/p>\n

Hard Inquiry:<\/b> Lenders will make a hard inquiry before the final approval of a loan application. Some online applications trigger hard inquiries. Every hard inquiry deducts around 1 to 5 points from your score. <\/span><\/p>\n

No Credit Check:<\/b> Some lenders won\u2019t need to check your credit score, and would evaluate other factors instead when you are applying for a loan.<\/span><\/p>\n

Most lenders will do a soft pull of your credit history if you are still applying or want to get a quoted rate. After pre-approval, lenders would do a hard credit check if you are going to move forward in the loan application process. The credit check’s impact on your score depends on the size of the loan, type of loan, and the state of your credit health when the check is done. Hard credit inquiries stay on your credit report for a couple of years and are visible to others that check your credit. However, its impact on your credit score wears off in about a year. <\/span><\/p>\n

Comparing lenders on <\/span>Bizzloans<\/b><\/a> won\u2019t affect your credit score. You can get a free quote here to compare financial solutions that can help grow your business. <\/span><\/p>\n

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GET A FREE QUOTE<\/a><\/p>\n

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Tips to Avoid Lowering Your Credit Score <\/b><\/h3>\n