Small Business Blog

Getting Better Creditability for Loan Applications

loan-applicationYour best option when it comes to purchasing a house or a car of your own is to do so with a loan from banks, credit unions, or a private third-party lending company. Having a good credit rep is essential for you to be able to be successful in applying for a loan. The members of today’s generation are highly dependent of their credit cards to do most of their purchasing, and while this may be as easy as swiping a card through a machine, the next thing that needs to be done is to pay for all these purchases. Unfortunately, these happy going individuals often fail to accomplish these responsibilities, thus forcing the hand of credit card companies to increase interest rates drastically on them and notifying the corresponding credit bureaus, thus ultimately straining their credit scores.

There are a number of things that can be done so that you can keep your credit scores good and make loaners believe that you are responsible enough to pay up your loans. People with credit scores below 650 may still be approved of a loan application, though the interest rates they will be given might be considered “unhealthy”, and leniency towards missed payments would be a rare feat for them to enjoy.

Following the things you can do to keep your credit scores acceptable in the eyes of loaners and credit bureaus will increase your chances of qualifying for great loans, that being loans that come with low interest rates.

One thing you can do is to correct the mistakes that are made in your credit report. These mistakes are inevitable, and sometimes you can be penalized for something that you didn’t really do. These clerical mistakes can sometimes mean the difference between your getting approved of a loan or not. It is therefore important that you check your credit reports regularly, so that you can correct mistakes in the event that some occur. Doing so might be a tedious task, but if you wish to be qualified for loan applications, you will want to correct these mistakes, especially if you’re planning on applying for a loan anytime soon.

You should also see to it that you pay your bills on time. Delaying the payment of bills is a nasty habit that a lot of people have in them, and this is definitely a bad habit that should be removed if you wish to be qualified for loan applications. When credit reports reflect unpaid payments within 2 years from when you wish to apply for a loan, you might be tagged as a high-risk applicant, which might be the cause of your application being revoked.

loan appsIf you have several credit accounts in your name, it would be wise if you keep your balance at a relatively manageable sum with respect to your total credit limit. The total balance of all your accounts shouldn’t exceed 25% of your cumulative credit limit. It would also help if the monthly payments that are reflected in these records show that the payments that have been made are somewhere above the minimum value that is due for your account. Your qualification for loan applications depend on the ratio of your balance to your credit limit, which in other words means that the lower your total balance from all accounts is with respect to your credit limit, the higher a credit score you’ll get.

If for example you’re in search for good auto loans financing in Langhorne or are looking for a private loan for college, it would be advisable for you to first improve your credit report, preferably months before you plan on applying. You can sign yourself up for a “How to Fix My Credit” seminar or discussion so that you may learn more techniques on how you can get better creditability. It would be a wise move to first get a copy of your credit report months before you apply for a loan in order for you to make the necessary changes to make your report more pleasing to the eyes of loaners.

If you’re seeking auto loans financing in Langhorne or perhaps requesting a private loan for college , it is wise to attempt way to improve your credit report prior to ever applying for any loans. Participate in a “How to Fix My Credit ” seminar offered by a local financial consultant and gain a copy of your current credit report preferably a few months before you apply for your loan. That way, you will know exactly what lenders will see and how best to address potential red flags when you do apply for the loan.

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