Maintaining a credit score is essential for lenders to give you a loan at the time of your need. A person who has a low or a poor credit score becomes vulnerable either to loan denial or gets charged with a higher interest rate.
Loans for personal funding are quite debatable, and often a lender may deny you a loan if your credit history isn’t good enough. Where on one side the introduction of FICO 10 & FICO 10T is believed to be a boom for the money lenders, it can be a pain for borrowers.
For someone who is looking to get a loan for clearing their credit, using it for personal use or get a business loan to set up a company or already established one - FICO scores will play an essential role for the money lender to give you that loan.
Let’s first understand the role of FICO in Personal & Business loans:
Loans for Personal Funding:
FICO is one sort of credit score keeping that with its high-tech application help the money lenders assess how good a consumer is in maintaining their credit scores.
It fetches the data of the credit that a borrower takes and keep records of how much he paid, timely payment or not, the activity for paying the debt and much more. It helps the lender to evaluate the credibility of a consumer and should the loan be passed or not.
Depending on your payment history, length of your credit history, outstanding debt, how many debts you took in the past couple of months – all will get evaluated and assessed by the lender before you are approved for the loan for personal funding.
Loans for Business Funding:
FICO scoring model is the most widely used application that money lenders use. Why? Simply because FICO models help to predict the behaviour of the consumer in the most accurate way! A money lending company can then decide whether to approve a loan for a potential client or not.
When it comes to approving loans for business funding, a money lender will scrutinize the loan application of the client and look into the business prospects as well. It depends from lender to lender. What approach they will use will decide how much loan a client can get and at what interest rate.
Will your business be able to repay the loan? A question which is of grave concern for a moneylender and therefore, before approving the application, he will like to evaluate your credit score. FICO being the best in the market amongst its other competitors, most money lenders have access to the application. It becomes necessary for the client to maintain a good FICO credit score to have higher chances of getting a loan on reasonable interest rates.
Can You Improve Your Credit Score?
To boost and accelerate your credit score, you may require the help of credit repair. Credit repair can clear off the bad payment history, to include charge offs, collection accounts and late payments.
There are ways to earn good scores by taking a few essential measures a tradeline companies can assist with. If your credit is cleaned and you are still shy a few points tradelines are the fastest, effective solution for you.
The problem that consumers face is to keep track of what FICO application a moneylender will use, as the credit score differs from version to version. Often comparisons are made like that of FICO 8 vs FICO 9. Now, with the introduction of FICO 10 & FICO 10T, it is going to be a game-changer. Nonetheless, you shouldn’t be worried about it at all!
The experts have come out with a solution for you! To keep track of each version and maintain scores is next to impossible and will drive you crazy. For a consumer, the focus should be on practicing good credit habits which are as follows:
- Timely payments.
- Not applying for new credit too often.
- Consistent payments.
- Credit card balance should remain at 30% and under.
- If you are looking to apply for new credit, make sure that the gap between the previous credit and the new one is of a reasonable period. Immediate credit application where a person already has a previous debt to clear can not only reject the loan application by the moneylender but also, will affect the credit scores.
For someone who is finding it troublesome chore to take care of their credit scores and need someone to do it for them, credit repair can be your solution. The experts know on how to stabilize and maintain the credit scores so that each time that you apply for a personal funding or business funding loans, your applications get accepted without any delay.
