If you’ve decided to apply for financing, be aware there are generally 2 ways to check whether you’re eligible for it or not. The 1st one is the traditional “credit check.” In this case, a hard inquiry is put on your account, and the loan provider reviews your credit score and credit bureau reports to figure out whether you can qualify for business funding or not. The 2nd one is the so-called “no credit check,” when the lender takes into account other factors so to determine your eligibility.
What is Credit Check?
A typical credit check is also called a “credit history check.” In this case, a financial institution or other lender views your credit history, other accounts, and credit score, such as a FICO® score. Also, the institution takes into account whether or not you’ve made payments on time, or at all, as well as whether or not any bankruptcies have been filed.
Missed or late payments, as well as court judgments for non-payment of debts will stay on your credit report for at least 6 years. The mentioned credit infractions are known as derogatory marks. The more derogatory marks you have, the riskier your business will appear in the eyes of lenders.
The Difference Between Bad Credit and No Credit
If you have bad credit, this indicates you’ve already established credit over time but have some derogatory marks on your credit report. Maybe you have some late or non-payment, accounts that have gone into collections, or even bankruptcy.
If you have no credit at all, this indicates you’ve no established credit history, so lenders can’t find anything positive or negative in your credit report. Credit scores generally range from 300-850. If you have no credit, you don’t have a credit score that lenders can calculate.
Here, it’s important to note that because of bad or no credit, you may:
- End up with denied loan and credit applications
- Be charged high-interest rates on loans and credit cards
- Have a problem getting approved for a new apartment or home
- End up with paying security deposits for utilities
- Have difficulty getting a cell phone contract
- End up with endless calls from debt collectors
- Pay higher insurance premiums
- Have a problem buying a new car
- Be unable to start your own business
As you see, bad credit or no credit at all can create lots of problems for you. Fortunately, you can turn to a reputable business loan provider and high risk payment processor like First American Merchant to get business loans with no credit check. Firstamericanmerchant.com is a reliable and secure alternative online lender that has an A+ rating with the BBB and offers exceptional business funding opportunities to merchants of any type.
With FAM, you can get access to merchant cash advances and ACH loans. First American Merchant supplies thousands of dollars to your bank account in as little as 72 hours. The bad credit history or the high risk nature of your business isn’t a problem for FAM.
Companies offering no credit check review your background information for identity verification, income, and other types of information. Thanks to business loan providers like First American Merchant, you can be sure your past financial mistakes won’t have a negative effect on your future choices.