Why it’s hard to get a bad credit business loan with a bank
Traditional lenders (like banks, building societies and credit unions) will check your credit score when assessing your business loan application. They can do this via credit reporting agencies in Australia like Experian, Equifax and illion. Any missed or late credit repayments can stay on your credit report for up to seven years. They will negatively affect your credit score. A credit score is also called a credit rating.
If you have a bad credit score, it’s highly likely that a traditional lender will reject your business loan application. And a rejected credit application further damages your credit score!
What’s a bad credit score in Australia?
Credit reporting agencies in Australia have slightly different credit scoring systems. However, your score will usually range between 0 and 1200. The higher the score, the better.
Any score below 550 is usually considered to be a bad credit score. Some bank lenders will require you to have a much higher score than 550 to approve your business loan application. You can find out your current credit score for free via credit reporting agencies.