There is no minimum credit score. Here is what lenders check instead.
By the AceTheSBA team
Search for the minimum credit score for an SBA loan and you will find numbers from 620 to 680. None of them come from SBA. Under SOP 50 10 8.1, there is no minimum credit score for 7(a) or 504 loans.
That is good news and a warning. No number disqualifies you automatically, but every lender reads your full credit report and has to discuss what is in it.
What lenders review
- Late payments, especially in the last 12 to 24 months
- Collections and charge-offs
- Liens and judgments, including tax liens
- Bankruptcies, foreclosures and pending lawsuits
- How much of your available credit you are using
A lender may use a scoring model, but it cannot rely solely on consumer credit scores. And when a lender certifies that you cannot get credit elsewhere, it cannot cite your credit score as the only reason.
Credit problems that are really eligibility problems
Some issues stop an application regardless of score: non-tax federal debt more than 90 days past due, such as a defaulted student loan, unless it is on a repayment agreement, and any previous loss to the government on a federal loan.
The lender’s view
A recent late payment with a clear, factual explanation is a discussion. The same late payment with no explanation is a question mark in the credit memo, and lenders decline question marks.
Your move this week
Where do you stand?
The SBA Readiness Report asks about your credit range and recent credit events, flags anything a lender will raise and checks federal debt as a separate eligibility rule. It takes about six minutes and costs $19.99.
This week’s tool
A 90-day plan to correct report errors and lower balances before you apply.
$15.00