The Top 10 Banks Ideal for New Businesses with Poor Credit Histories

Navigating the Banking Landscape: A Guide for Entrepreneurs

As a Credit Specialist, I'm often asked by entrepreneurs about the best banks to start their businesses with. Here's a comprehensive guide to help you navigate the banking world and increase your chances of funding success:

Tier One Banks

Chase Bank, Citibank, and Capital One are considered Tier One banks. They typically use the FICO 8 scoring model.

Tier Two Banks

Wells Fargo is a Tier Two bank, using the Experian FICO 9 scoring system. They offer easier access to funding and can provide a line of credit after as little as 6 months of business credit card usage. U.S. Bank is another Tier Two bank that uses FICO 9 and provides convenient checks for liquidating card balances.

Tier Three Banks

Navy Federal Credit Union and Connector are examples of Tier Three banks that use Experian FICO 9, with Connector being a Community Development Financial Institution (CDFI) with more flexibility for small and minority-owned businesses. BCU and Vidiian are Tier Three banks that use the Vantage Score 3 system, which also considers authorized users, rental payments, and utility bills.

The key advantages of these Tier Two and Tier Three banks are their easier access to business credit cards and lines of credit, often without the lengthy waiting periods required by larger institutions. Many also offer 0% introductory APR periods on their business credit cards, providing valuable cash flow flexibility.

Remember, when choosing a bank, consider your specific needs, credit profile, and the institution's scoring model to maximize your chances of securing the funding you need to grow your business.

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