---
title: What Do You Need To Know About Online Invoice Factoring!  Part 1 of 5
description: How factoring really works!
image: https://www.fastarfunding.com/hs-fs/file-16060115-png/images/exclamationpoint1.png
---

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## [What Do You Need To Know About Online Invoice Factoring! Part 1 of 5](https://www.fastarfunding.com/blog-factoring/bid/51546/What-Do-You-Need-To-Know-About-Online-Invoice-Factoring-Part-1-of-5)

Posted by [Jonah Schnel](https://www.fastarfunding.com/blog-factoring/author/jonah-schnel) on Wed, Apr 13, 2011

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![small business factoring invoice, factor invoice, factoring facility, factor accounts receivable definition, online invoice factoring](https://www.fastarfunding.com/hs-fs/file-16060115-png/images/exclamationpoint1.png)This is the first in a series of articles about what you really need to know before you pick a factoring company.  

**Personal Credit, Does it matter?**

 While most [AR finance companies](https://www.fastarfunding.com/home.aspx) will advertise that your personal credit does not make any difference, that is not always completely true.  Chances are factors will obtain a credit report from one of the major credit scoring agencies on you. 

 

There are two reasons factors are concerned with your personal credit.

 

- Personal Guaranty – Most [factoring firms](https://www.fastarfunding.com/about.aspx) will require you to personally guaranty the advances when you sell invoices.  When they are deciding to approve a new factoring facility for you, they want to know that if push comes to shove, do you have the personal finances to help secure the advances they make.  Just because you have poor credit history doesn’t necessarily mean you won’t be approved for capital factoring but it is definitely a part of the decision making process.

 

- Fraud – The biggest risk to a [factoring company](https://www.fastarfunding.com/contact.aspx) is fraud.  Analyzing your personal credit is one of the ways for commercial finance factoring companies to protect themselves from people whose only intention is to commit deliberate fraud.  

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