The cost of living continues to grow year on year; meaning that many more households are searching for a solution to cover the cost of monthly bills and day to day living. Personal overdrafts and loans are being used more frequently to bridge this gap, so knowing how to improve your chances of accessing this money will stand you in good stead for when you need to borrow.
Here are some top tips for making sure that any loan you need is approved:
All banks, building societies and lenders will run credit reports on your payment history to assess your financial stability. It’s vital that you know your credit score before approaching any lender, as having a good score will significantly improve your chances of being approved. Even if you don’t need to borrow money immediately, looking at this now will give you time to make improvements that will drastically change your rating.
Your credit history may not actually be correct, so it’s a good idea to look at your details and make sure that all addresses, personal details and past account details are correct. There may be a debt on your file that has been paid, but not cleared, and this could affect your overall score.
Avoid late payments
Bear in mind that anyone thinking of lending you money will be looking at how well you pay back your current debts, so make sure that you don’t miss any installments and set up standing orders or direct debits to make sure that you don’t fall behind. It may only take a couple of late payments to ruin your chances of being approved.
Make sure that you are registered on the Electoral Roll. The majority of credit transactions requiring a credit score will simply refuse your approval if you’re not registered. It’s also a good idea to check that the address given on the electoral roll matches the address that you are using to apply for the loan, as any differences mean that you may not be correctly linked to the right information.
Reduce your balances
If you currently have store or credit cards, try to reduce your balance so that it’s significantly below your limit. This will help lenders to see that you can be trusted to repay the debt responsibly.
Keep old cards
If you have an old credit card that you haven’t used in a while, it may be worth making a small purchase with it to ensure that the lender doesn’t close your account. It’s a good idea to keep any cards that you’ve had for a long period of time as it shows a long history of good payment and will help to improve your credit score.
Once you have made the decision to apply for a loan, research your options carefully as every time a credit report is run by a potential lender, your score could be reduced. A good way to tackle this issue is to submit applications to lenders within a small time-frame of a couple of weeks.
If you do decide to apply for a cash loan, following these tips will mean your chance of being approved is greatly increased.