How to Improve Loan Amounts through Your Credit History

How to Improve Loan Amounts through Your Credit History, If you have already applied for a business or looking to avail one, you must already be aware of the importance of your credit history. This is one element that essentially defines whether the loan application you made will get approved by the lender or not. Your credit history sums up the past performance of your loan accounts that are thoroughly checked by lenders when it comes to determining your credit-taking eligibility. Based on your credit history, a credit score or rating is assigned to you that tells everything about your credit performance. In order to increase the likelihood of getting a loan approved, it is advisable to maintain a good credit story. Additionally, understanding how having a good credit history can help you is crucial.

Benefits of Good Credit History for Loan:

Let’s get to know them below.

1. Quicker Approval of Loans: 

Whether you want to take a short-term loan or a longer one, a good credit history simply increases the likelihood of getting your loan application approved. Whenever you keep on making timely repayments of the availed loan, your credit history keeps improving which is the first thing lenders check while evaluating a loan application. Not only your loan will get approved, you can also become eligible for higher loan amount, lower interest rates, and easy repayment terms.

2. Get Premium Office Space:

Not just having a good credit score and credit history would help easily get business loans or working capital loans, but it would also help you lease a premium office space in your preferred location. These days, landlords and proper owners prefer to check the credit profile of the business before they rent out the space to them. This is to ensure that the business would be able to pay the monthly rent on time always.

3. Get Investors:

Along with the attractive business loans, a higher credit score and excellent credit history also helps businesses in attractive new investors for business funding. Whether you want to start a new venture or looking to expand an existing one, it would be easier to attract new investors for your business plans of any type. This is because the potential investors are more likely to check your credit history while evaluating your candidature. A good credit history would instill confidence in them regarding your business presence. You can accomplish it with the aid of a number of tools, including company financing, asset and liability management strategies, and sound financial management.

How to Use a Business Loan to Build a Good Credit History?

Taking up any kind of loan and ensuring that you make timely repayments always tends to enhance your credit history. But when it comes to the terms and circumstances of your first company loan, you have to exercise extreme caution. Your initial business loan may come with higher interest rates that than they typically are, but flexible repayment arrangements may be able to make up for that. For instance, Investkraft provides up to 50 lacs in unsecured company loans that may be repaid in monthly or biweekly installments. Additionally, there are no pre-closure charges if you choose to close your business loan before the first installment is due. These loan conditions facilitate working capital loan repayment and raise your company's credit rating.

Read More: Different Ways To Improve Your Credit Score For Free

Importance of Good Credit Rating

In today’s fast-paced world, credit has become an intrinsic part of our lives. Be it buying the latest iPhone, doing home renovation, buying a home, taking a car, or even meeting a health emergency, there are many things around us that can only be fulfilled with a huge sum of money. This is where using credit instruments like loans and credit cards becomes necessary.

But when it comes to seeking credit, people with poor credit performance may have a hard time getting a loan. This is because they were not unable to pay the loan amount on time in the past. Such incidents were recorded in their credit report. For banks and lenders, it is necessary to know the past credit records of borrowers to determine whether they are credit-worthy or not. Whether you want to take a home loan, auto loan, personal loan or a credit card, your credit score and credit history are two elements that are checked by almost every lender.

So, having a good credit history is not just a fab but a necessity too. As a business owner, it would help you in multiple ways that would always help you drive your business towards success without worrying about finance. Not only do you get easy approval on your credit application, you can expect to get a higher loan amount, repay the loan at a lower interest rates, multiple investors for business investment, and more. If you have a poor credit history, it is recommended to take steps to improve it as soon as possible.

FAQs

How can I improve my low credit score?

There are several steps you can take to seek an improvement in your credit score. For example, make repayment of loans and credit card dues on time, don’t take too many loans, keep your credit utilization ratio low, check and report errors in your credit report.

Can I check my credit score for zero cost?

Yes, it is totally possible. At Investkraft, you can check your credit score for free and take necessary actions accordingly. Similarly, there are several other portals available on the internet where you can check your credit score for free.