Don't Be Afraid of a Credit Check

The mere mention of a visit to the dentist is enough to make a fully grown person cower. But do you know what's even more frightening for some? The notion of a credit check. However, as is the case with most experiences, it's scary only if you don't have a clear idea regarding what it's all about.

So what is a credit check? Well, whenever you apply for an auto loan, mortgage or some other form of lending from the bank (as well as, in some instances, insurance products), you'll find that the institution will first evaluate your credit information to analyze the risk of doing business with you. This is known as a credit check, and it helps the organization determine whether you'll make your payments on time or be likely to default.

How is it done?

Certain businesses access either your credit score or credit report, or possibly both, for a credit check. Some organizations even use screening software that returns a rating between 1 and 9, based on your credit information, to convey how likely you are to default. The minimum information required to draw your credit report is your name and social security number, and sometimes you may also be asked to provide your birth date and address.

Who is allowed to check your credit?

As per the Fair Credit Reporting Act, only organizations with a valid or permissible purpose are allowed to conduct a credit check. This means the check must be connected with either a credit transaction, employment, insurance underwriting, professional licensing or other similar business need.

What is expected from a credit check?

Different organizations look for different things during a credit check. For example, while a credit card issuer will examine the number and kind of credit cards you already have, and how you've handled them, a landlord is more likely to concentrate on previous collections from property management companies. However, certain events, such as bankruptcies, evictions, foreclosures, lawsuit judgments, late payments, debt collections and charged off accounts - or even a lack of credit history - are all likely to be looked upon unfavorably by credit institutions.

Nevertheless, there is no reason why a credit check should make you worry. For starters, very few people have perfect credit, yet they get approved for all kinds of loans. Different institutions have different requirements for granting the same kind of loan, so even if you are turned away by one organization, you may find success with another. Moreover, even if you are denied credit due to a bad report, you can always approach organizations that offer loans to consumers with troubled credit.

The best way to ensure that you are approved is to review your own credit report before you apply for a loan, and try and fix the issues that you feel are likely to hurt your chances of getting it. (You can obtain a free credit report once a year from each of the three credit bureaus, Equifax, TransUnion and Experian, via AnnualCreditReport.com). In some cases, you may even find that there are errors on your credit report that are damaging your score. You can either correct all these issues yourself, or you can hire a credit repair company for the purpose.

Another way to ensure that you sail successfully through a loan application is to take the advice of experts who know exactly what kind of credit profile financial institutions look for before granting a loan. Thanks to years of experience, our team at Fund&Grow is adept at guiding clients in such a way that they not only pass all the credit checks and qualify for the loan they apply for, but also get it at extremely favorable rates. For a flat fee, we can get you as much as $250,000 of unsecured credit at 0% interest through credit card financing. And what's more, we hold your hand through the entire process so that you needn't spend precious time and energy on anything other than growing your business. If you, or someone you know, needs funds, all you need to do is call us at (800) 996-0270, and we'll take care of the financing part for you.