Managing credit scores is important – working with a single source financing company can help
| February 19, 2010Tech Financial Services continues to get creative in finding new ways to finance machine tools for industry. For newer or smaller businesses, our underwriters typically ask for personal guarantees on equipment leases. We understand that some people and their business have tight cash flows. We work diligently to help out in any way possible.
One way to obtain a competitive lease is to manage your credit rating. When you apply to a leasing company for credit, an inquiry is made on your credit, with multiple lease applications requiring multiple credit inquiries. Each credit request will reduce your credit score, so it is in your best interest to minimize credit applications and only pursue leases that are both likely to be approved and will provide favorable terms.
You should know your individual or business credit rating. We’ve summarized credit ratings below for your reference.
The average American credit score is 692 (November, 2009)
- 775-850 – Excellent – This represents the best score range and best financing terms. The dividing number is 750 as anything above this means you’re a very low risk. Only 13% of the nation’s population has scores above 800.
- 685-774 – Very Good – Qualifies a person for favorable financing. 58% of Americans have credit scores above 700.
- 675-699 – Good – A score in this range will usually qualify for most loans. This range typically represents a consumer with no late mortgage payments and no more than one day late payment on consumer credit.
- 620-674 – Sub-prime – May still qualify, but will pay higher interest. A score above 650 will most likely qualify you for a loan or a lease. For many credit grantors, 620 is considered the bottom dividing line between good and risky credit.
- 560-619 – Risky – Will have trouble obtaining a loan. Nearly 20% of the U.S. population has a credit score under 620. Fall below that and you are likely to be labeled a high risk for a lease, loan, or line of credit.
- 514-559 – Very Risky – Need to work on improving your rating.
- 350-514 – Bad
For more information, refer to the web site below.
www.scoreassist.com provides a free 2010 credit report and scores, plus assists in reading and understanding your credit report, controlling & improving your credit and real time disputes of negative items”
The experts at Tech Financial have more that 50 years combined leasing experience, and we know what to look for in financing new or used equipment.
We understand the machine tool industry and our programs will give you the flexibility you require. We offer loans, leases, or a custom tailored alternatives; providing a package that fits within your business plan and best serves your financial needs.
If you have further questions contact us at 414-224-0220 or email Mark with your questions at markc@techfin.net.
