Personal credit score range
What it means
A credit score is a number that sums up how reliably you've paid back borrowed money in the past. In Canada it runs from 300 to 900.
For small business loans, lenders usually look at your personal score, especially if the business is new.
Why lenders ask
A higher score tells a lender you pay on time. That usually makes approval easier and can mean a better rate.
Why your personal credit matters for a business loan
A young business has little or no credit history of its own, so the lender looks at the next best evidence: how you have handled credit personally. Most small business loans also ask the owner for a personal guarantee, which makes your own track record directly relevant.
In the "5 Cs of credit", your credit history is a large part of character: the lender's judgement of whether you'll do what you say.
What moves a score
Paying every bill on time matters most. After that, how much of your available credit you are using, how long you've had credit, how often you apply for new credit, and the mix of credit types all play a part.
If your score is lower than you'd like, the quickest improvements usually come from bringing card balances down well below their limits and making sure nothing is past due. Check your report from both bureaus for mistakes too, and ask for corrections. Errors are more common than people expect.
Good to know
You can check your score with TransUnion or Equifax. Looking at your own score doesn't lower it.