Did you know you have a FICO small business credit score that banks use to help …
Did you know you have a FICO small business credit score that banks use to help make their lending decisions? Like your personal FICO credit score the SBSS score can single-handedly make or break your chances of getting business financing! Not only that but the SBA (Small Business Administration) also uses the score to pre-screen loans it insures. What is the FICO SBSS Score? FICO LiquidCredit Small Business Scoring Service (or FICO SBSS score) is one of the three main business credit scores. Its the one credit score all business owners should know but many have never heard of it because until now its been hard to get your hands on it. Banks arent required to disclose that they use the FICO SBSS score and very little information exists about it online. More lenders are using it because it helps them make faster more accurate lending decisions. This means they can make decisions in hours not days. In fact the U.S. Small Business Administration (SBA) now uses the score to pre-screen its most popular 7(a) loans. If your score falls below their minimum threshold you may not qualify for one of the most attractivelowest interest ratessmall business loans available. Starting at the beginning of 2014 all SBA 7(a) loan applications up to $350000 are required to go through a business credit score pre-screen. To be clear if youre applying for an SBA loan most likely its a 7(a). Heres how SBSS works: SBSS scores can be used for term loans and lines of credit for amounts up to $1 million. If youre applying for $1 million or less chances are your lender will use SBSS to help make its decision. Like personal credit scores FICO SBSS rank-orders small businesses by their likelihood of making payments on time. The FICO score ranges from 0 to 300. The higher the score the better. The minimum score to pass the SBAs pre-screen process is currently 140. But most lenders set their minimum score at 160. The scoring is based upon personal and business credit history and other financial information. A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score. If you have derogatory or no credit history it can take months or even years of positive credit activity to move your SBSS score significantly higher. Its vital to build your credit and ensure its healthy before you need it. Because businesses are not covered by FCRA protections you can be denied business financing due to your SBSS score and lenders are not required to notify you of the reason why. How is the credit score calculated? The short answer is the score is calculated by looking at personal and business credit history as well as other business financial information like: age of the business number of employees financial data such as revenue and assets. It truly is a global view of a businesss overall financial health! If you have no business credit history and limited time in business the highest possible FICO SBSS score you can get is 140. But to do so would require pristine personal credit. Banks and lenders can set up the SBSS model in many different ways putting more weight on certain information and less on others. For example it can put more weight on your business credit profile or more on your personal. Its also a very smart business credit scoring model because it will automatically go from one business credit bureau to another in whatever order of priority the lender prefers until its able to generate a score. So if the lender prefers checking the Experian Intelliscore (business credit) as the default the SBSS pulls in the Experian data set. If that report doesnt offer enough information it will automatically check another business credit score like the D&B PAYDEX score. It could also then move on to your Equifax business credit data. If theres not enough business credit data available it will just use the personal credit data to calculate the SBSS score along with your business financials. Who uses the FICO SBSS score? SBSS scores can be used for term loans and lines of credit for amounts up to $1 million. The FICO SBSS score is used by over 7500 lenders nationwide to help them make lending decisions. Large banks include: KeyBank Huntington National Bank PNC RBC USBank Zions Bank HSBC Santander Bank. The SBA uses it to pre-screen. Cutoff is 140. Banks will use it to pre-screen their loan applicants but they usually set their cutoff higher typically around 160. If your score falls below that they will look at your business as too much of a risk. Plus banks dont want to waste their time filling out lengthy SBA loan applications if they are confident youll get denied because of a low FICO SBSS score. How can I improve my FICO SBSS score? You can take steps now to start improving your FICO SBSS score you need to take care of your personal credit and start building business credit. Nav will help you take steps to improve both personal and business credit in one spot. Lastly you may just need time: Time to show solid business financial history that makes your business look more like a solid bet. #creditrepair #creditscore #creditreport Learn More Here – > ift.tt/2ENqctd
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