What credit score is needed for a business loan?

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    For a business loan, lenders tend to look at both your personal and business credit scores. The scores needed depend on the type of loan you are applying for. Most lenders look at your FICO® Score. A score above 670 is a good FICO Score. If you have a credit score above 700, that is ideal to negotiate for the best deals.

    The business credit score is a bit trickier because there are multiple credit scores generated as part of a business score and each credit bureau has its own scoring models. A higher business credit score means that your company has shown a positive history in bill payments and has been responsible in terms of general credit behavior. According to Forbes, Dun & Bradstreet’s® PAYDEX has a range of 0-100 and a good PAYDEX range is between 80-100. There is also a failure and delinquency score that D&B generates, indicating the likelihood of the business being delinquent in payments and failing in the next 12 months.

    If it is the FICO® Small Business Scoring Service, the range is between 0-300. This is an important score if you want to apply for the government-backed Small Business Administration (SBA) loan. Most lenders usually look for a personal credit score in the mid-600s to approve you for an SBA loan.

    Each lender is different and looks at other factors such as the age of your business and revenues generated in order to decide if they can approve your loan.

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