In the world of business financing, credit scores play a crucial role in determining whether a business owner qualifies for a loan. We, as lenders, rely heavily on credit scores to assess the creditworthiness and risk associated with lending to a particular business. Understanding the impact of credit scores can help you navigate the loan application process more effectively.
What is a credit score?
A credit score is a numerical representation of your creditworthiness, based on your credit history and financial behaviour. It is calculated by credit reporting agencies like CIBIL, who evaluate factors such as: payment history, credit utilisation, length of credit history and types of credit used.
Types of credit score
Here are the standard credit score ranges and their corresponding ratings:
| Credit score range | Credit score rating |
| 300-579 | Poor |
| 580-669 | Fair |
| 670-739 | Good |
| 740-799 | Very good |
| 800-850 | Excellent |
Minimum credit score required for a business loan
Generally, a higher credit score means you are more likely to get approved and get better terms for your loan. For a Bajaj Finserv Business Loan, a credit score of 685 or higher is desirable.
However, a high credit score is not the only criterion to be eligible for our business loan. Here are all the requirements that you will need to meet:
- Nationality: Indian
- Business vintage: At least 3 years
- Work status: Self-employed
- Age: 18 to 80*
*You should be 80 or younger at the end of the loan tenure.
It is important to check your credit score before you apply for our business loan. If it is low, you can improve your score by taking the following actions:
- Making timely payments on ongoing loans
- Limiting new credit applications
- Fixing errors on your credit report
- Maintaining a good credit utilisation ratio
