Starting a trucking or a logistics business can be quite challenging due to the amount of investment that it requires. On top of your office and warehouse space, the vehicles that you need to be able to begin the business are equally costly. The actual cost of your trucks, the permits and registration that it needs, plus maintenance and running cost, can pose to the finances of a business.
Getting a truck financing is one of your best options to get your trucking business started. There are plenty of day cab semi trucks for sale that can be acquired through finance. However, your credit score should be good enough to secure a truck loan that is workable and advantageous on your end.
There are plenty of ways on how you can improve your credit standing to be able to secure equipment financing for your trucks. Keep in mind that it can be a long process, but it is possible, even with a current bad credit standing.
Here are some of the tips that you can follow:
Table of Contents
Have your Credit Report Reviewed
Before everything else, you should determine if your current credit report and standing is still updated. Have it reviewed by a professional to see if there are loans that should have been updated with your credit report. In some cases, there can be mistakes in a person’s credit report. Even if you do not see the chances of having a discrepancy on your credit report, it is always helpful to have it checked regularly. You can request a copy of your credit report from the three major credit bureaus in the United States – Experian, TransUnion and Equifax.
Determine Areas for Improvement
Once you have an updated credit report, you can now determine areas that require improvement. The first area to improve your credit score is your overdue payments. The number makes up about 35% of your credit score. Catch up with payments to reduce the risks that creditors see in you as a potential client. Once you are able to catch up with your overdue payments, you’ll be able to see your credit score improve tremendously.
Reduce Debt
One of the significant reasons that may affect your chances of securing a truck financing is the amount of debt that you have. Your debt contributes around 30% of your total FICO score. Once you reduce the amount of debt that you have, you’ll be able to see your credit score improve.
Clear Outstanding Accounts
If you have any standing accounts for collection, it may be best to pay them one by one to raise your credit score. As soon as you clear these accounts, you can ask your lenders to remove the negative hits on your credit report. Get it in writing to formalize full payment of these accounts. You’ll be able to increase your chances of getting a high credit report by doing so.
Whether you are securing a loan directly from a bank, a credit union or a financing company, you are required by most of these agencies to have a good credit score that is within their specific requirements.
Improving your credit score gets you better chances of securing a truck financing for your business. However, you can still apply and get qualified with financing even with a bad credit score. There are several lenders who take risks with people and businesses with bad or low credit scores. However, in these types of loans, the interest rates and the payment options may not be as desirable at the rates that you will get if you have a good credit standing.
Joie Mojica
Joie is the passionate writer and blogger of UsedVending.com. She enjoys writing and works at an amazing pace. Blessed with two adorable boys, she dreams of creating a successful career online. She also loves to write about parenting, home and family life, technology and gaming, as well as beauty and health.