Funeral Home Financing FAQs – Credit Score

Funeral Home Financing FAQs – Credit Score

Is my credit score very important when a bank determines my loan?

YES, your credit score is very important in today’s tough credit market. Banks will use your credit score as a handy tool to assess how much risk is involved in lending to a potential borrower. The higher the likely borrower’s score, the lower the risk faced by that lender. A higher score will also determine your chance of getting the available rate and term. What we have seen is that most banks will reject a loan based solely on the credit history of that potential borrower.

An average score that lenders will consider favorable is 680 or higher. Every bank is different, however some can work with a FICO score of 630 while others require 680 or higher. Based on our research, the average American range is 651 to 720 tracking during these turbulent credit times.

The credit score will also be cleared from time to time because your payment history determines your credit score. If you have difficulty making your payments before the due dates, it will affect your credit rating and lower your score. For example: someone with an average score of 700 or higher can increase their score by up to 20-25 points by paying their bills at the right time in a given month. Establishing or re-establishing a good payment history will help strengthen your score.

Another item that can lower your score is having high debts and stretching your credit cards to their maximum limits. This can lower your credit score by as much as 70 or 80 points.

While it’s better to have a credit card account than not to have one, you need to make payments on time to boost your credit score. Someone who doesn’t own a credit card, for example, tends to be at higher risk than someone who manages their credit cards responsibly from month to month.

One thing to remember before applying for a large business loan is to get your own credit report. By getting your own credit report, you can review and verify the items we just covered in this short segment.

Remember: in today’s market, your credit score is king!

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