This article was written by Nidhi Mahajan.
Credit is one of the most important things to the average person’s financial profile. You’ll find that the better your credit is, the better the terms of almost any deal you can make with people and businesses.
The most widely-used assessment of your credit-worthiness is your FICO score, and there are several ways you can improve it.
Revolving Credit and Installment Credit.
One way involves the securement and maintenance of two types of credit: revolving credit and installment credit.
Revolving credit is simply the credit card variety, while installment credit refers to business loans. In fact, businessloans.co has a wide selection of some of the most popular lenders of the latter type. Securing one and paying it off on time represents a huge boost to your credit health – as long as the one you select reports to the credit bureaus.
This is why it’s imperative you only get business loans from reputable sources.
You Can Use Credit Unions and Banks.
As you compare terms from online and offline vendors, be sure to consider local banks and credit unions in your search for a viable installment loan. Credit unions, in particular, are well-known for their practice of allowing secured loans, with your certificate of deposit or savings account used as the collateral.
For comparison, an unsecured loan is one of the credit card variety, where the interest you pay is the indicator of the “trust” the lending institution has in you based on your past credit-related interactions with merchants and lenders.
Other types of secured loans for which you may be eligible, if you don’t specifically want a business loan at the moment, are mortgage and auto loans. Usually, people who are in the market for a business loan, but lack the minimum credit score to obtain a viable one, will go after a government mortgage loan because of the lower requirements.
What Kind of Business Loans Can You Get?
There are as many different kinds of business loans as the consumer desires. The market adjusts to meet a need, because this is profitable.
The salient aspect of a business loan is that, as an installment loan, it has paid over a variable period of time with a spate of scheduled payments. The shorter the loan term, the less interest you pay overall since there’s less risk involved (by the lender’s reckoning). However, you’ll pay more interest monthly (or on whatever payment interval it comes with).
Some of the more popular business loans are offered by lenders such as the Lending Club, which is quite amenable to people with subpar credit histories. The reason the Lending Club is able to secure business loans for so many people is that it is a sort of clearinghouse. It taps into many loan markets and helps you find the one tailored to your needs. The origination fee is a small percentage of the loan amount.
Other business loan providers are On Deck, Credibility Capital, Currency, Street Shares and Kabbage, just to name a handful. They’re all reputable, and report any installment loans that you secure to all three major credit reporting agencies, so that your credit history can positively reflect the loan.
Just keep in mind that for some lending institutions, there are certain business metrics that go into whether or not your application will be successful. These include how much revenue your business has, the loan amount (of course), and other factors.