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Unsecured Line of Credit Understanding the Qualifications


How to know if your credit profile is fit enough for unsecured lines of credit.

If you want to qualify for unsecured business lines of credit, you should first understand what they are and the different forms they come in plus the qualifications you need for. Secondly, you should know what lenders want to see on your personal credit profile to determine if you will be approved - and for the best rates (sometimes with 0% intro offers). Knowing this (and applying what you know) will enable you to increase your chances of getting approved for unsecured business lines of credit.

A well-established personal credit history is needed to get an unsecured business line of credit. As a rule of thumb, your personal credit history should be at least five years old. You should also have at least one personal credit card in your name (with at least a $5,000 credit limit). The personal credit card should be at least one year old. Lenders will want to see that you can manage credit card debt over time before they will approve you for an unsecured business line of credit. That's why it's important to have a personal credit card in your name for a period of time before you apply for an unsecured business line of credit. If you've never had a personal credit card in your name, you likely won't qualify for an unsecured business line of credit.

If the personal credit card you have in your name is over 30% utilized, you may be denied for an unsecured business line of credit. It's wise to keep the amount of the personal credit card you use under 30% of the total available credit limit. For example, if you have a $10,000 personal credit card in your name, it would be wise to use no more than $3,000 of it. Anything over that amount would increase your utilization to over 30% and lenders will see it as you've maxed out your credit cards. You will need to pay the balance down to qualify for an unsecured business line of credit (or any other credit cards for that matter).

In addition to keeping your credit card usage low, you can't have any derogatory or delinquent accounts reporting on your credit profile. Late monthly payments, collections, unpaid tax liens, repossessions, and bankruptcies will get your application for an unsecured business line of credit denied. You also can't have a lot of recent hard inquiries (in the last six months). Hard inquiries happen when lenders pull your credit report for the purpose of making the decision to extend you new credit. The best way to get approved for an unsecured business line of credit is to maintain a good credit history and higher than average credit score.

Gregory K Mohr
361-772-6401
greg@franchisemaven.com
BS - Electrical Engineering/Physics
MBA - Management Information Systems
Certified Franchise Consultant
Franchising, Financing and Credit Repair
Financing Maven
Franchise Maven

Franchise Maven


4425 Burke Rd,

Flatonia, TX 78941

Phone. 361-772-6401

Email. greg@franchisemaven.com