Learn 7 Tips To Get Your Small Business Loan Approved
Obtaining Your Credit Score and Reports
Each year, you are entitled to one free credit report, but credit reports may not always reflect your real credit score. You can get your free yearly credit report to see where you stand with your accounts, but you’ll generally have to pay a modest price to obtain your exact credit score.
Most lenders require specified credit ratings to qualify you for a loan. Because each credit agency rates credit differently, you should obtain credit reports from TransUnion, Equifax, and Experian.
Several Credit Scores
You may not realize it, but you may have multiple credit scores, and it’s important to be aware of all of them before applying for a loan. In general, you have a FICO and a Vantage credit score. However, different financial institutions generate several scores within each of those categories, and certain scores are only reported to specific bureaus:
• FICO 5: Calculated by Digital Federal Credit Union (DCU), this score is only available via Equifax.
• FICO 8: American Express, Discover, Bank of America, Walmart, and a few other financial companies calculate this number. This score is reported to all three agencies by American Express, whereas Discover only reports to TransUnion and Experian.
• FICO 9: This score is calculated and reported to Experian solely by Wells Fargo.
• FICO Credit Score 8. This score is calculated solely by Commerce Bank and is only available through TransUnion.
• NextGen FICO. PenFed Credit Union and HSBC calculate this score, which is exclusively available through Equifax.
• A VantageScore of 3.0. This score is calculated by multiple online financial companies and is available from all three main credit bureaus.
The list above is not full, so contact your banking institutions to learn where they report your credit accounts. You must understand where your credit is recorded so that you can obtain the correct reports and clean up your credit before applying for a loan.
