What lenders check when your credit is under 600
A low score is a starting point, not the whole story. Lenders look at why the score is low. Late payments from several years ago usually weigh less than ones from the last few months. Open collections, unpaid judgments and tax liens are often bigger concerns than the score itself, and many lenders will not fund with an active tax lien unless there is a payment plan in place. A discharged bankruptcy is treated differently from an open one, and lenders set their own waiting periods.
Lenders also look at your existing obligations. If your bank statements show debits to other lenders, they will factor those payments into how much more you can afford. Being upfront about existing advances or loans tends to go better than having an underwriter discover them.
How to compare offers when every option is expensive
When credit is weak, the question is less which offer is cheapest and more whether the payment fits your cash flow and the funding earns back its cost. Convert each offer into the actual payment amount and compare it with your average monthly deposits. If the payment would take a large bite out of your revenue, the loan can create the next cash crunch.
Be skeptical of any lender that promises guaranteed approval, charges fees before funding, or pressures you to accept immediately. Legitimate lenders disclose total repayment and payment frequency before you sign, and some states require specific cost disclosures for commercial financing.
When to repair your credit before borrowing
If the need is not urgent, a few months of credit cleanup can widen your options. Pull your reports for free at AnnualCreditReport.com and dispute errors directly with the credit bureaus. Paying down credit card balances can help, because utilization updates as card issuers report new balances. Set up written payment arrangements on collections and liens, and keep every payment on time.
Your business also has its own credit files with business credit bureaus, separate from your personal score. Vendor accounts that report on-time payments can build that history over time. Avoid applying with many lenders that each run a hard inquiry, since multiple inquiries in a short period can lower your score further.