| Lenders will
want to review both the credit history of your business (if the
business is not a startup) and, because a personal
guarantee is often required for a small business loan, your
personal credit history.
It's often a wise decision to
obtain a credit report on yourself and your business before you
apply for credit. If you discover any inaccuracies or problems,
you can correct them before any damage to your loan application
has occurred. If you can, find out which credit reporting
company your prospective lender uses and request a report from
that company.
Commercial credit. Before
you apply for commercial credit, you should review a credit
report on your own business, if your business has been in
existence for a while. You can obtain a free Business
Information Report on your own business from Dun &
Bradstreet, by calling 1-800-234-3867. If D&B does not yet
have any information on you, they will allow you to voluntarily
obtain a listing by providing them with some basic information
about your business.
Most conventional lenders will
expect a minimum of four or five trade experiences listed on a
business report before they consider the business's
creditworthiness. If you have been operating your business
without credit, or with personal assets, you should consider
making some trade credit purchases in order to establish a
credit history for your enterprise.
Consumer credit. Consumer
credit agencies are required to remove any information from the
report that cannot be verified or is shown to be inaccurate.
However, before you submit a letter disputing any debt to the
credit reporting company, it's often a good idea to contact the
relevant creditor directly. If an error was made, you can often
clear up the dispute more quickly if you take the initiative.
If the dispute is not resolved
and your credit report is not adjusted, you have the right to
file a statement or explanation regarding the alleged debt with
the credit report. If your credit report does have some
tarnishes on it, you might consider requesting that any
creditors with whom you have had a good credit history, but who
did not report the transactions, be added to the report. For a
minimal fee, most credit bureaus will add additional creditor
information.
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to Understanding The Lending Process
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