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How fraud can affect your business loan application

Fraud and business loansApplying for any new business loan can be risky, particularly if it’s from a bank: there’s always a good chance that the computer will say no.

However, a refusal doesn’t necessarily mean there’s anything wrong with your creditworthiness: it could be down to credit fraud.

So how can you tell if your identity has been stolen – and more importantly, what can you do about it?

When you get a fraud alert on one of your credit reports, that is the credit reporting bureau’s way of protecting you from new account fraud or identity fraud.

New account fraud occurs within 30 days of opening an account under your business’s name, and the aim is for the scammer to obtain new credit cards, lines of credit or loans. The effect on your credit rating can be enormous.

How will I know if I’ve received a fraud alert?

The problem is that you may not. At least, not until you check your credit report or a helpful lender notifies you.

However, if you’ve become suspicious or have already suffered fraud, you can ask the credit bureaux to apply fraud detection technology to your report and proactively contact you if anything appears untoward.

This technology will note any inconsistencies in your financial behaviour and more importantly will tell lenders to double-check that the company applying for the credit is actually yours.

For short-term problems, you can set up an alert for a fixed period of time (usually 90 days). However, if you have ongoing issues, you can request an extended fraud alert, which can last for up to seven years.

So what happens when a potential lender spots a fraud alert?

A fraud alert requires the lender to confirm your identity before proceeding, which can be as simple as making a telephone call. (For this reason, it’s vital that you supply up-to-date contact information whenever you apply for credit.)

However, this due diligence will inevitably delay the application process, and in some cases may disbar you from receiving the loan at all.

How can I get fraud indicators removed from my report?

If you’ve set up fraud detection yourself or have been denied credit due to a fraud alert, you can simply confirm your identity to the credit bureau and have the flag removed from your account.

But before you do so, you should make sure that there is no ongoing fraud on your account, otherwise you could be creating more problems for yourself down the line.

Don’t forget to talk to Cashsolv

Cashsolv are the specialists in small business finance, and we can help you when other lenders are reluctant. To learn more about our innovative range of small business finance solutions, please visit our business finance page.

Carl Faulds By Google+ |
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