Your business credit score isn’t just a number it’s your company’s financial handshake with the world.
What Credit Score Do Lenders Look At For Business Loans?: When small business owners seek funding, one of the first things lenders assess is creditworthiness. But the common question is: What credit score do lenders actually look at for business loans?
Understanding which credit score is evaluated and what score you need to qualify can help you prepare smarter and improve your chances of securing financing.
Business Credit Score Vs Personal Credit Score
Lenders often examine both business and personal credit scores, especially for small or new businesses.
- A business credit score (like those from Dun & Bradstreet, Experian Business, or Equifax Business) typically ranges from 0 to 100, with scores above 75 considered excellent.
- A personal credit score (usually from CIBIL, Experian, or TransUnion) ranges from 300 to 900, and most lenders prefer a score of 750 or higher for favorable loan terms.
According to Poonawalla Fincorp, many lenders evaluate both scores to gauge the owner’s financial habits and the company’s reliability.
Minimum Scores Required By Most Lenders
Lenders vary in their requirements, but the minimum CIBIL score most commonly accepted for business loans is 650, as mentioned by The Unity Bank.
If your score is:
- 750+ – Excellent: You’re likely to get approval with better interest rates.
- 700–749 – Good: Approval is possible, though terms may vary.
- 650–699 – Fair: Approval with higher interest rates or collateral may be required.
- Below 650 – Poor: Approval is difficult unless supported by strong financials or secured assets.
Other Factors Lenders Consider
While credit score is crucial, it’s not the only factor. Lenders also review:
- Business age and stability
- Annual revenue
- Cash flow statements
- Collateral or assets
- Debt-to-income ratio
As Hero FinCorp explains, consistent repayments, a low credit utilization ratio, and limited recent inquiries can improve both personal and business credit standing.
Why Business Credit Matters More Over Time?
Building a strong business credit profile allows you to:
- Qualify for larger loan amounts
- Access lower interest rates
- Separate personal and business liabilities
- Boost your company’s financial reputation
Over time, lenders rely more heavily on your business credit score rather than your personal credit, especially once your business becomes well-established.
For a deeper dive into how business and personal scores differ, visit Credit Help India.
Frequently Asked Questions (FAQ)
What Is A Good Business Credit Score For A Loan?
A score above 75 (on a 0–100 scale) is typically considered good by most lenders evaluating business credit.
Do Lenders Check Personal Credit For Business Loans?
Yes, especially for startups or small businesses. A personal CIBIL score above 750 is generally preferred.
Can I Get A Business Loan With A 650 Credit Score?
It’s possible, but expect higher interest rates or the need for collateral. Many lenders require at least 700+.
How Do I Check My Business Credit Score?
You can check your score via agencies like Dun & Bradstreet, Experian Business, or Equifax Business.
What Impacts Business Credit Score?
Payment history, credit utilization, business longevity, public records, and number of accounts all influence your score.
Can A Poor Personal Credit Score Hurt My Business Loan Chances?
Yes. Many lenders assess both business and personal credit. Low personal scores can be a red flag, especially for newer businesses.