Avoiding Surprise Credit Rejections is Good Business

Getting rejected when you apply for credit is never a good feeling. But not only does it affect your mood, it can also affect your company’s ability to borrow in the future. Since every official “no” from a lender can negatively affect your credit scores, it’s important for companies to avoid credit rejections whenever possible. For clarity, we are talking about “a full credit application was submitted” rejection where a hard credit inquiry was used, and not quick pre-approvals or soft inquiries. We are also assuming mainstream B2B lenders, and not “bad credit/no credit ok” lenders (more on that later). In applying for business credit, sometimes a “no” can be surprising. But all too often, that “surprising” credit rejection shouldn’t have been a surprise at all, as the reason(s) for the rejection were plain as day to the lender. Most mainstream B2B lenders have three tiers for application approvals and rejections:

  1. Automatic rejection (typically algorithm-driven)
  2. Passes initial algorithms but subject to human review
  3. Automatic approval