Loan Applications: Understanding Your FICO LiquidCredit Score
Most people are familiar with their personal credit score. The FICO score is used in over 90% of all underwriting decisions in this country. It’s relatively simple to contact the three major credit reporting agencies to find out your numbers.
However, the FICO LiquidCredit Score is different and especially important for small business owners. Pay attention to this score. If you’re below a certain threshold, you won’t be able to get financing.
What Is It?
The FICO LiquidCredit score is a global score giving banks and other lenders a view of how both the owner and business perform in personal and business money management.
The score is a compilation of your personal credit history, your business’ credit history and the financial standing of your company. These are figured into a number that falls on a scale of 0 to 250, used to assess credit risk.
Like other credit bureaus, your FICO LiquidCredit score looks at factors like whether you pay your bills on time, how much debt you have and the different types of credit that have been extended to both you and your business. The financial history of your business and cash flow management are also considered.
How Can I Find My Score?
Unlike other business credit bureaus, FICO doesn’t give your liquid credit score directly. However, before you apply for a business loan, ensure you’ve done everything you can to increase the personal credit of all of the business owners, ensure your business’ Dun & Bradstreet report is clean (if you have one), and ensure you’re not late on any existing business loan payments.