If you require a personal loan and are worried about your ability to qualify for the funding you need, you should know that there are things you can do to help improve your chances of being approved. Below you will find five tips that can help you improve your chances of qualifying for an installment loan. The more tips you choose to put into action, the better your overall chances of securing a loan will be.
Tip #1: Lower Your Credit Utilization Ratio
Lenders want to see that you are using a minimal amount of the credit that is available to you. This helps to ensure that you are not financially overextended. If you are currently carrying large account balances, you will want to pay down these accounts before applying for an installment loan.
Tip #2: Avoid Closing Any Of Your Older Credit Accounts
The length of your credit history can often be just as important as your credit score. This is because lenders want to know that you have proven to be responsible over a long period. If you are paying off old debts in anticipation of applying for a loan, be sure to leave these accounts open once you have paid the balance. This will ensure that your credit history is not shortened as a result of accounts being removed from your credit report.
Tip #3: Be Sure You Have Deposited Your Savings In The Bank
You should expect that potential lenders will check your bank balances to determine how financially stable you are. The more money you have in the bank, the less likely you will be to default on an installment loan if you experience short-term changes in your income. If you currently have any savings that have not been deposited into the bank, you will want to deposit these funds before submitting your application.
Tip #4: Do Not Make Any Major Purchases Before Submitting Your Loan Application
Whether you choose to pay with cash or with your credit card, making large purchases shortly before applying for a personal loan can spell trouble. This is because lenders are often looking for stability in an applicant's spending habits when reviewing a loan application. If you make any large purchases this can give the impression of financial instability and could cause your loan application to be denied.
Tip #5: Boost Your Credit Score By Voluntarily Including Household Expenses
Credit bureaus now offer individuals the ability to boost their credit score by reporting household expenses such as utility bills and rent payments. If you have a good payment history for these types of accounts, choosing to voluntarily include these accounts in your credit report is a great way to get an instant boost to your credit score which can ultimately help you get approved for the installment loan you require.
For more information about installment loans, contact a local company.
