The Leasing GroupThe Leasing Group

Tag : credit score

By Bob Callander

Credit Scores are on the Rise

Credit Scores are on the Rise

Summarized from The Wall Street Journal

 

Consumer credit scores continued to climb in the U.S. this past spring due primarily to lower unemployment and steady economic growth.  This trend is further enhanced by the credit agencies and the way they report historical consumer financial problems.  Foreclosures and bankruptcies originating during the “great recession of 2008 – 2010 are just now starting to fall off individual credit reports.  More than six million U.S. adults will soon have their recession-related financial problems completely wiped out.  Higher credit scores will follow.

Average credit scores nationwide surpassed 700 in April 2017, the highest average scores since 2005.  This helps the economy since higher scores enable lenders to not only make more loans but make them at lower / less risky interest rates.  Most affected will be the purchases of “big-ticket” items as consumers buy more cars, boats, appliances, furniture, and homes.

Credit card borrowing, already on the rise, should also continue to trend further up thanks to higher card limits and more competitive / lower interest rates.

Altogether, higher credit scores are good for borrowers, lenders, and the economy in general.  Look for a flood of new loan solicitations and credit card promotions.  The economic cycle leading to easier credit for more credit worthy consumers is well underway.

By The Leasing Group

What businesses need to know to qualify for credit

So, you’re considering an equipment lease for your business, and you’re starting to look into how the credit process might work. You probably know that your financial history plays a big part in qualifying you for lease financing. But did you know other factors can affect your credit and, in turn, your ability to get lease financing?

Consider the following before you apply for a lease.

First, do your financial statements show profitability? Banks want to see profitability over the course of several years. Banks also look for positive cash flow and a positive net worth on your balance sheet.

Sometimes a negative net worth can be offset by current profitability. The Leasing Group can help sort through any holes or discrepancies in your financial statements and present your company’s economic situation in the most favorable light.

Next, how long have you been in business? To have a viable credit history, it helps to have a business history of at least three years. However, if your business is relatively new, you might still be approved if you can show strong personal credit and liquid assets.

What about cash flow coverage? If you take your operating cash flow and divide that by existing debt payments, including principal and interest, is the result 1.25 or greater? If not, lenders might have a hard time justifying an addition to your debt load.

And finally, do you, as the business owner, have a credit score of more than 700? Are you sure? Have you checked your score recently? Small, unpaid or disputed medical bills often lower your score often unbeknownst to you. The Leasing Group can help you sort out personal credit problems before you apply for a lease.

If your company is a bit iffy on a couple of the above points, let The Leasing Group present your financials and increase your chances of approval. Our experienced advisors understand lease financing and can often find creative ways to enhance your chances of approval. For example, if you’re looking to lease a revenue-producing piece of equipment, we can demonstrate how it will positively impact your financial statements.

If your credit picture is a little blurry, let The Leasing Group take a new look at it through our expert eyes. Contact us at (502) 547-2773.

Credit Scores are on the Rise