Ensuring your credit history helps your finance application
Credit scoring is part of the process used by banks and other lenders to help assess whether they will lend to you. My latest report on the SME finance Appeals Process shows that a poor credit history is the most common reason for a business owner to be turned down for bank finance – in fact, over half of applications that were rejected over the past 15 months failed for this reason.
What is not widely known is that your personal credit score can affect your bank’s decision to provide you with business finance. This is particularly true if you are a start-up and only require a small amount of credit. Small businesses with a turnover of less than £25,000 are shown to be particularly affected by problems with their credit history.
Because your credit history is so important to the success of your finance application, the banks have joined forces to promote better understanding of the issue by producing a helpful guide. The guide suggests several simple ways in which you can improve your credit score, thereby improving your chances of a successful application.
Professor Russel Griggs, Independent External Reviewer of the Appeals Process