Applying for a loan can be a tense affair as you eagerly wait for feedback. Fortunately, there are ways you can improve your chances of being approved. We provide tips to bring you closer to that approval.
Get a Copy of Your Credit Report
Because a lender will look at your credit report before making a decision, it is better if you see it first before you apply for a loan. If there are any mistakes on the report, get these fixed and update the credit reporting system. Add applicable explanations for clarity. You can apply for a credit report from Experian, Equifax, or TransUnion. You should note that each CRA uses different scales, 0 to 999, 0 to 700, and 0 to 710, respectively.
The lender will be able to review all the times you have borrowed money, as well as your score, and any payment defaults. The credit report will also tell a lender how many times potential lenders have checked your credit history, how you pay your utility account, all credit cards and accounts you have, and your current balance. This history goes back six years.
Improve Your Credit Score
If you have credit cards that are not currently in use, you should cancel them. Build up a good record by paying accounts on time. Make sure you are on the electoral roll for elections.
Protect Yourself Against Fraud
While you are not guilty of fraud, when such items appear on your account, they will also be reflected on the credit record. The lenders will not be able to tell that you were not responsible so you will have to liaise with your bank to have them removed from your credit history and bank account. The cybercrime unit of the UK police provides these tips for protecting yourself from bank fraud.
Find a Guarantor
A guarantor is a person who co-signs your loan. A lender may offer you this option if you have a low credit score. Choose someone with a good credit score as the guarantor’s credit record will also be checked. If you default on the loan, this person will become liable, so you should be sure of your intent and ability to repay the loan before involving someone else.
Consider Applying for an Unsecured Loan
A secured loan is held against existing assets, such as your house. They tend to have lower interest rates than unsecured loans as, if you default on repayment, the lending institution will repossess your home.
An unsecured loan, on the other hand, has a higher interest rate because it is unsecured. These loans may also be called personal loans. They are simpler than secured loans and approval times are far quicker, sometimes almost instant. All that is involved is the loan amount and the interest, provided you pay instalments on time.
How you manage the repayments on an unsecured loan can have an impact on your credit rating. Missing and late payments will result in extra charges being added to your loan. You might also find yourself in court as the lender tries to recover the loan contract amount. If you are looking for unsecured loans NI, Compareni.com provides you with options to explore.
There are plenty of options, so do your homework and find the loan that suits you best.
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