Finance Credit

Does Good Credit Get You Better Loans?

Published at 02/03/2012 18:32:34


Credit transactions are common in businesses around the globe. Most of the heavy transactions within businesses are done through account payables, notes payables and bond payables. Since cash is not always available in the desired quantity, credit transactions are of significant importance in carrying out businesses smoothly without any delay or hindrance. Businesses usually credit get from different financial institutions to meet their financial needs, however it is obligatory to meet the credit deadlines in order to get reputation among creditors and to credit get easily whenever it is needed. All this is possible with the help of maintaining a good credit history.


Whenever any business or even individual person goes for getting credit or loan for personal or professional purpose, the most important thing that any financial institution considers is a fully audited and satisfying credit report. Whether you are going to get a credit for millions of dollars or even a consumer loan for a car, you will need a proper and good credit report. Credit report is the legal document, maintained by credit agency, that contains all personal information about the business entity or even for a individual. It indicates the resident area, paying of charges and bills, whether a person has been arrested or even sued ever and whether the person has ever got defaulted or faced bankruptcy.


With the help of credit report, creditors make assumptions about lending, risk involved and interest rate. They estimate the deadline punctuality of the debtor and measures the level of his ability to meet its obligations on time. All these factors affect creditors terms and conditions. Hence it is of immense magnitude to have a good credit report to get a credit for your business. In addition, for any business, whether it is large scale or a small one, interest expense is the factor that contributes significantly in increasing the company’s overall operating cost. When creditors see the bad credit history in the credit report, they tend to charge higher interest rate than usual because of the risk of bankruptcy or delayed repayments from the debtor. Under such circumstance, businesses are compelled to pay higher charge for their borrowings and thus have to incur increased operating cost and eventually lower margin of profit or income. If business possess a good credit, it can not only credit get easily but also it can negotiate better with the creditors on its own terms and conditions.

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Furthermore, having good credit is also beneficial for getting investment perspective. Being rated higher by the credit rating agencies, business can create good image in the minds of potential investors which can be either creditors or buyers of shares. This can increase the share prices of company in future. By a credit get easily and on time, enables a company to expand and meet its all financial and non financial needs. Such a company does not face any difficulty in getting credit from different institutions and creditors. Hence a good credit get can definitely get you better loans.