|
|
Credit Scoring
Credit scoring is the job of the credit bureau. They collect the information about the credit history of potential borrowers, and attach a score to it. This evaluation system is what the lenders will use to determine how risky a particular business is to invest in. The better the credit score of the business, the more likely the lender will give them the capital they are applying for.
Credit scoring for businesses relies on several factors. First, any business credit cards that the business's employees use are checked for payment history. Also, any new credit that the business owner has shopped for will be considered. Finally, the strength and age of the business is considered when giving the business a credit score. When a small business does not have a credit score, but needs money, the lender may consider the credit score of the owner when deciding whether or not to lend the business money.
More Glossary Terms Explained here
| |
Suggest an Article
