Consolidating debt hurt credit score

If you’re looking to consolidate a small amount of debt (under K), then business credit cards can be a great option.

They’re typically much easier to get, and faster to apply for than either term loans or SBA loans.

Knowing when it’s the right time to consolidate business debt depends on the terms of your existing debt, your business’s current finances, and your personal credit.

consolidating debt hurt credit score-81

Keep in mind that your credit score improving by only a few points is not likely to qualify you for a better loan, because your increase needs to be significant.

Also, no matter how much your credit score improves, negative credit events like bankruptcies, tax liens, or repossessions can make qualifying for a small business debt consolidation loan nearly impossible.

We asked Mihir Kroke of Able Lending when the right time to apply for debt consolidation was, and this was his reply: “There are two timelines to keep in mind when consolidating business loans.

Timeline #1 applies if you had good credit and took out a short term loan because you needed the quick-turnaround time of a short term loan provider.

Consolidating at the right time can get you lower interest rates, better repayment schedules, and longer terms.

Consolidating at the wrong time can waste your time, damage your credit, or get you a bad loan that can hurt your ability to borrow in the future.

When you accomplish an important business objective, it’s often a good time to start thinking about consolidating.

Anything you can do to paint an upward swing on your business’s revenue and/or overall financial strength is a big positive in getting approved for a loan.

In that case you would want to wait for three months of positive revenue trends before applying for a consolidation loan in order to increase your chances of approval.” In other words, unless you’re consolidating loans you took out for expediency’s sake, you should consolidate your business debt when you’re a better applicant for a loan than you used to be. Here are 5 signs it’s a good time to consolidate your business debt: If your personal credit score has significantly improved since you last borrowed money, then now might be a good time to consolidate your business debt.

An improved credit score is an important qualification for lower interest rates and longer repayment terms.

Smart Biz may be able to help you consolidate up to 0k in business debt with SBA financing.

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