Staggering statistics gathered by FICO show that while approximately 14% of the U.S. population has no credit score at all, and is labeled “credit invisible”, currently, the nation’s average credit score has reached an all-time high of 695. While the need to have a perfect credit score has plagued the average American for years, we’re not alone in our struggles.
Many other countries operate under similar systems, which has naturally opened the market up to a range of loan companies that do in fact offer personal loans to those with poor credit ratings, such as this example from Norway. However, having suffered at the hands of FICO’s unforgiving points system for so many years, it seems that America’s credit rating is on the up and this can only mean good news for anyone looking to expand their business.
Current U.S. credit rating context
According to Bloomberg, around 200 million U.S. consumers have a registered FICO credit score and just under three million, which is around 1.4% of the population, have managed to secure a perfect 850. Essentially, these statistics seem to indicate that America could finally be approaching what might arguably be defined as a peak credit score. If this is the case, what are the benefits for those with a small-to-medium sized business to manage? Well, quite a few actually…
Credit cards and loan approval
Let’s be nice and clear from the start. Even with an 850 credit score, you shouldn’t assume that any credit card or loan application you make will be automatically accepted. Most lenders still take a range of others factors into account, including income and current debt. However, with a high credit rating you are likely to be more successful than not. With access to a larger credit sum and the power to invest a significant amount of money in your business, you might be able to take on more staff, open a second office, begin offering a secondary product line, or even take your business sales and services abroad.
The power of negotiation
One of the most crippling aspects of managing a business can be the interest rates on credit cards and loans. However, if your credit rating happens to be following the nation’s present trend, it’s likely you’ll be able to better negotiate and bring those high interest rates down to an acceptable level. You’re also likely to benefit from a greater quantity of offers that are suddenly made open to you; offers that are hardly ever made available to those with poor credit ratings.
On a similar note, banks and money lenders tend to keep a tight rein on the amount of money they’re willing to lend people with low credit scores. Any kind of business expansion that’s really going to make a positive impact on your reputation, staff morale and profit is going to need a helpful push from a large sum of capital. If you’ve been feeling frustrated, unable to take your company to the heights you’d like to in recent years, it might be worth testing your current credit score to see if you, like many Americans at present, are in the right kind of position to really push forward with significant developments.
Cheaper car insurance
Some businesses would really benefit from cheaper car insurance. If you offer your employees company cars or if you regularly delivery products to customers, a higher credit score means that insurance companies are likely to offer you less to insure all vehicles to the standard required. Indeed, if you currently send your products to customers by outsourcing to an external delivery company, you may want to revise your options. Cheaper car insurance options could end up making the management of your own fleet of vehicles the more viable and reliable option.
While the benefits mentioned are by no means exhaustive, they certainly begin to illustrate the extent to which business expansion poses less of a problem to those with good credit scores. If America’s current trend continues and credit score remains high across the country, we might experience a real boom in financial and creative business success as we move into 2018. So, don’t get left behind. Start investigating and see what kind of options are perhaps already available to you. 2018 could be the year when your business really soars.