Credit score is one of the first things any lender checks — but “what score do I need?” doesn’t have one answer. It depends entirely on which type of loan you’re pursuing and which lender you’re applying to.
Personal Credit vs. Business Credit
Most small business lenders check your personal credit score, especially if your business is less than three years old or doesn’t have an established business credit profile. This is because in the absence of a long business history, personal credit is the best proxy available for your behavior as a borrower.
Personal credit is measured by FICO scores ranging from 300–850:
- 750+: Excellent — qualifies for best rates
- 700–749: Good — qualifies for most loans
- 650–699: Fair — qualifies with most online lenders
- 600–649: Below average — limited options, higher rates
- Below 600: Poor — alternative lenders or MCAs only
Business credit is measured differently by different bureaus:
- Dun & Bradstreet PAYDEX: 0–100; 80+ is considered good
- Experian Business: 1–100
- Equifax Business: Failure score and credit usage score
Minimum Credit Score by Loan Type
| Loan Type | Typical Minimum Score |
|---|---|
| Bank term loan | 680–700 |
| SBA 7(a) loan | 650–680 |
| SBA Express | 650 |
| Online term loan | 600–620 |
| Business line of credit (bank) | 680 |
| Business line of credit (online) | 600–625 |
| Equipment financing | 600–620 |
| Invoice financing | 500–550 |
| Merchant cash advance | No minimum (500+) |
What If Your Score Is Too Low?
Short-term fixes (1–3 months):
- Pay down revolving debt to reduce credit utilization below 30%
- Dispute errors on your credit report
- Become an authorized user on a business partner’s high-limit, low-utilization account
Medium-term fixes (3–12 months):
- Apply for a secured business credit card and pay it off monthly
- Open a Net-30 vendor account and make consistent on-time payments
- Avoid applying for multiple loans simultaneously (each hard pull lowers your score)
Longer-term (1–2 years):
- Establish a formal business credit profile with Dun & Bradstreet (file for a DUNS number)
- Make on-time payments on all existing business and personal obligations
- Keep business and personal finances fully separated
A low credit score doesn’t mean you can’t borrow — it means you’ll pay more and have fewer options. The best time to build credit is before you need a loan.