How to Overcome Poor Credit Score?

Sourcing finance for your business is one of the major aspects of starting a business. Moreover, if you try to source finance via traditional routes while having a poor credit score, the things get deteriorated further. This can be frustrating and can hinder your business growth. Poor credit score problem is extremely prevalent in the UK and it overruns the business aspirations of many people. 

Getting your loan approved while having a poor credit score is quite a challenging task. But this challenge is not invincible. There are many things that go into consideration while granting a loan and credit score is one of these things. So it is important that you know about poor credit score before applying for bad credit business loans guaranteed approval in UK.

What does bad credit score mean?

Banks take into consideration your credit score while assessing your application for a loan. Poor credit score is one of many reasons for the denial of loans. Bad credit score reflects the following: 

• Non-payment of a loan on time is the most influential factor that determines your credit score. So, poor credit score asserts that you were unable to repay your past loan on time.  
• The second most important factor that determines your credit score is the total amount owed by you. This includes mortgages, loans, bills and credit cards. Poor credit score means you owe a substantial amount of money beyond normalcy.  
• Credit score also reflects your length of credit history. It shows the oldest account on the credit report. Poor credit score means longer credit history.
• Credit mix is another important factor and highly affects the probability of the approval of the loan. Credit mix shows the number of debts that have been borrowed. Poor credit score reflects many debts.  
• A credit inquiry is another factor, and it is the count of inquiries made by a person for additional debt. Poor credit score means numerous credit inquiries, and it further deteriorates the chances of loan approval.  

Is it possible to resolve poor credit score?

A poor credit score depends on lots of factors and hence is not so easy to fix. But there are some efficient ways to enhance your credit score substantially.  

• Settings up an online payment option for your credit card and loans ensure that you pay debt and loans timely. This enhances your credit score.  
• Take efforts to pay more than the minimum dues. This increases your credit score.

How to get loans approved with bad credit score?

A poor credit score can be frustrating and many people give up. Here are some ways to increase the chances of loan approval:  

• Searching for independent lenders is possibly the best option. There are more than 100 trusted independent lenders in the UK that offer loans even on poor credit score. Independent lenders are more supple while analyzing risks. Apart from credit score, they also consider the business plan, projected success and market trends in such business. These things overshadow poor credit score in most of the cases.  
• Unsecured business loans rely solely on your credit score and this can be a deal breaker for you. Securing loan against your business assets and property provide ample amount of security to the mainstream lenders and this solidifies your chances of loan approval.

Poor credit score is the thing of past and can’t be changed. But spoiling your future because of the poor credit score is a bad idea. These steps and ways can be adapted to enhance your credit score and get your loan approved without killing your business aspirations. 

Read Also:-Unsecured Loans- Your Bill-Paying Weapon In Bad Credit Situation