When financing companies decide whether to offer you restaurant equipment financing leasing, they consider your credit score first.
When applying for restaurant equipment financing leasing, there are a number of factors that leasing companies look at. One of the most important factors is your credit score. Like it or not, you credit score will determine the rate that you get, if your loan will be approved and how long the lease term will be. Credit scores range between 300 to 850. If you have a credit score of more than 700, then leasing companies and even banks, consider you to be credit worthy.
With that being said, your credit score opens doors and offers a wealth of benefits for your restaurant business. How, therefore does your credit score affect restaurant equipment financing leasing?
How Does Your Credit Score Affect Your Restaurant Equipment Financing Leasing?
When dealing with large kitchen equipment purchases, or business loans, there is always a large financial risk involved. The reason your credit score is important is because it will tell your lender if you are capable of repaying any debt accrued in full and in a timely manner.
Now, equipment leasing companies are known to have leasing programs where they lease to companies with damaged credit scores. One such place to find companies with such programs is LeaseQ. LeaseQ is one of the places where you can connect with a number of top financing companies who are willing to lease to you despite the fact that you have a low credit score. The good thing about them is that they only do a soft credit pull so this virtually has no impact on your credit score.
Credit unions and traditional banks typically require you to make down payments but independently owned restaurant equipment leasing companies do not require any form of collateral so your credit score is the determinant of the rate you will get.
Why Do You Need To Regularly Evaluate Your Credit Score?
If you plan on obtaining restaurant equipment financing leasing, you should regularly check on your credit score. Every time you check on your credit score, ensure that there are no discrepancies and check to see if your payment history is up to date and accurate.
There are two types of credit inquiries you should know about if you want to know how your credit profile looks like. The first one is a hard inquiry, which is usually done by restaurant equipment leasing companies. You should avoid these types of inquiries because they can significantly lower your credit score for several months. When too many of them are done, they can really add up and damage your credit score.
The best type of credit inquiry is the soft credit inquiry. This one is usually done by employers, by you and by companies that provide loan offers or pre-approved credit cards. You can do as many inquiries as you like because they will not hurt your credit score.
How Can You Maintain Your High Credit Score?
While a good credit score helps you negotiate better rates when looking for restaurant equipment financing leasing, you have to ensure that you maintain it. You can start by limiting your credit applications, keeping your balances low and reducing debt when possible.
Get an Instant Quote on Your Equipment Lease, Free
Ensure that you make your lease payments on time. For instance, if you have a credit score of 700, and you make payments 30 days late, your credit score might drop by 150 points or more. When you have a low credit score, acquiring more kitchen equipment can prove to be very difficult. The mentioned strategies do not necessarily guarantee that your credit score will remain high but they have proven to be very successful.
How Can You Repair Your Low Credit Score?
There are many ways that you can increase your credit score and get better rates for restaurant equipment financing leasing. First, you can ensure that you do regular checks on your credit score and take care of any discrepancies. Clear all your debts as soon as possible and get a credit card if you do not already have one.
Having a strong credit profile can make a significant difference in your restaurant’s immediate and long-term future. It enables you to get better rates and even a wider variety of equipment options to choose from.
For more information on restaurant equipment financing leasing, simply CLICK HERE.