When you run a business, access to funds can help you grow faster. Whether it's to buy equipment, stock up inventory, or expand operations, you may need financial help. This is where an online business loan becomes useful. But before you apply for a business loan, there's something important to consider—your credit score.

A credit score is a three-digit number that shows how trustworthy you are when it comes to repaying loans. It is based on your repayment history, credit usage, and overall financial behaviour. Many lenders check your credit score first when you apply for business loan online. It can affect your chances of getting the loan, the amount you can borrow, and even the interest rate. Let's look at the three main ways your credit score affects your online business loan eligibility.

1. Approval Chances for an Online Business Loan

When you apply for business loan, lenders use your credit score as a filter. A high credit score (typically above 750) shows that you have been responsible with money. This makes you a low-risk borrower in the eyes of lenders. So, if your score is good, you have a much better chance of getting approved when you apply for business loan online.

On the other hand, a low score (below 650) might raise red flags. Lenders may see you as a risk and either reject your application or ask for extra documents, higher interest, or security. So, improving your credit score before you apply for business loan is always a good idea.