How Bad Credit Impacts Your Ability To Get A Loan

They don’t trust you. That is as direct and as simple an explanation we can give. If you suffer from the unfortunate burden of having bad credit, your bank isn’t likely to approve any loan application you may submit. The truth is that you need to be able to show a history of paying back whatever you borrow from your lenders. That includes credit card debts, mortgages and any other loans. Has having bad credit impacted your ability to get a loan?

What is your current credit score?

In Canada, your credit score is a three digit number that ranges from 300 to 900. It is calculated by Equifax and TransUnion. Your safest bet is to have a credit score that is no lower than 700. Generally, credit scores of 700 or more are considered to be either very good or excellent. When your score dips below 700, it is considered average until you get closer to the 600 mark. According to Loans Canada, anything below 620 is poor.

“Scores in this range indicate that the individual is high risk,” informs their website, “It may be difficult to obtain loans and if approved, they will be offered higher interest rates…Scores in (the 579-500) range are rarely approved for anything, but credit can be repaired.”

The site goes on to note that a credit score less than 500 is considered terrible. “Individuals who’s credit scores are less than 500 will not get approved for new credit and should seek credit improvement help,” the site reports.

Bad credit can have many negative repercussions.

So says Daniel Kurt on Investopedia.com. He points out that people with bad credit have fewer renting options and have higher insurance costs. They also usually have to pay deposits for utilities and even have difficulties landing jobs. A poor credit history, he warns, can have wider-ranging consequences than you think. Having trouble getting a loan is at the top of the list.

“It probably doesn’t come as a surprise that before handing you a new loan, banks want to know how likely you are to pay them back,” writes Kurt, “A low score can make it harder to borrow, whether it’s a car loan, mortgage, or credit card account. And if you do qualify, you’ll likely have to pay higher interest rates to make up for your great level of default risk. A lot of credit card issuers, for instance, require a credit score that’s somewhere between ‘good’ and ‘excellent’.”

A bad credit score will NOT impact your ability to get a merchant cash advance!

One of the best aspects of the unique merchant cash advance program offered by Synergy Merchants is that it is NOT a loan. As a result, your credit score neither matters nor will it be impacted. If it sounds too good to be true, please don’t hesitate to call us at 1-877-718-2026 or email us at info@synergymerchants.com. We would be happy to teach you all about our alternative business funding source. You can also apply online for a free, no obligation quote!