How Fraud Alerts Affect Your Business Grant Application

Applying (and getting approved!) for business funding is hard enough, but when you’re marked in red on your credit report, it’s even more difficult. There are many reasons a lender might reject your loan application, but there is one that you may not expect: fraud.

Good news? It is not impossible to find business finance, especially with a little extra work and research. The bad news? It will be a little harder than it will be without a blemish on your resume.

According to a study done in 2014, one giant 66 percent Small businesses are victimized each year, and the typical affected organization loses about 5% of its annual revenue to fraud. And some business owners don’t even discover it until they run their credit report. Business identity theft can happen to any size of business, and since small businesses don’t tend to have complex security systems, they are often even more vulnerable.

If you’re concerned about fraud affecting your business funding application, here are a few tips.

First, do your best to avoid cheating in the first place

Of course, the easiest way to make sure fraud doesn’t hurt your loan application is to take steps to prevent it in the first place. While it’s impossible to completely avoid becoming a victim of business fraud, there are some things you can do to monitor your credit and protect yourself.

Monitor your credit

Even if you’re not currently in the business financing market, it’s a good idea to set up credit monitoring services. Programs like Directional will proactively monitor both your personal and business credit for new accounts or suspicious activity and send you instant notifications if anything goes wrong.

Be careful about the details you share

Phishing, both via email and text, is one of the most common tricks used to get personal data points from businesses. If you receive a message with an unfamiliar phone number or link — especially one asking you to update your information—Do not share any personal information. The sender may be creating malware to gain access to your phone.

Bypass Free Public WiFi

It might be tempting to log into that public WiFi, but most public networks don’t offer much security on mobile apps, so it’s much easier. steal your private information in this way. If you decide to use public WiFi, never do online banking while connected — wait until you’re on a private and secure network.

How will fraud affect your business loan application?

Credit card issuers and credit reporting agencies are constantly monitoring your credit for suspicious activity. When something comes up, the credit bureaus will issue a fraud warning against your credit report. This is Transunion, Experian or Equifax telling lenders to be careful because the person applying for a new account may not be you.

If you are a victim of fraud, you can also set up your own fraud alerts. This is a way to tell credit bureaus and lenders to double check that the grant applicant is really you.

Slower process

When there’s a fraud alert in your account, it’s mandatory for lenders to take additional steps to verify your loan application, which can slow down your loan application significantly. down the approval process. In some cases, fraud warnings may prevent you from qualifying for certain loan products. While overall, a fraud alert usually won’t prevent you from getting a loan approved, it will certainly make the process longer and take longer.

If you’re the one adding a fraud alert to your account, you’re probably prepared for a slowdown. While it’s an extra step, you should avoid adding a red mark on your credit report. But what happens when you intentionally apply for a loan – only to have the lender turn it down due to fraud concerns?

Remove fraud alert

Whether you’re the one who added the fraud alert or your (valid) app incorrectly triggered the warning, you’ll want to contact the credit bureaus and ask them, in writing, to remove it from your account. Of course, you want to be absolutely sure that nothing worrisome is going on with your account, especially if you have been a victim of fraud in the past.

Fraud is a real concern when it comes to business finance. Not only can undetected fraud lower your credit score and make it difficult to get a loan, but fraud alerts will also slow down the whole process. If you have a fraud alert in your account, you’ll need a few extra steps and a little more care to get that loan—but it’s not impossible.