Credit Pull
A credit pull is the act of accessing a consumer's credit report from a credit bureau (Equifax, Experian, TransUnion) — used in MCA underwriting to evaluate the personal creditworthiness of a business owner who personally guarantees the funded advance.
Why This Matters
MCA underwriting blends business cash flow analysis with personal credit evaluation. Most MCA deals are personally guaranteed by the owner, making personal credit relevant despite the product's cash-flow-driven structure. Credit pulls require permissible purpose under FCRA — typically the merchant's express written consent in the application. Credit pulls fall into two categories: soft pulls (for pre-qualification, no consumer impact) and hard pulls (for funding decisions, may slightly impact consumer credit score). Compliance with FCRA permissible purpose, adverse action, and risk-based pricing notice obligations is mandatory.
Frequently Asked Questions
Frequently Asked Questions
Do MCA funders pull credit on every applicant?
Most do for funding decisions (hard pull at approval stage). Some pre-qualify with soft pulls before time-investment in deeper underwriting. Practices vary — high-touch funders may underwrite cash-flow-only without credit pulls for lower-tier deals.
What credit score thresholds matter for MCA?
Most funders accept FICO scores ≥540-580 for first-position deals. Higher scores (650+) unlock better factor rates. Sub-500 scores typically restrict to specialty programs at premium pricing. Cash flow strength can override credit weakness in many MCA underwriting models.