It does not matter what type of loan you are seeking, there are a few things you can do to improve your chances for approval. Your work starts before you fill out a single loan application. Here is what to do:
Review Your Credit Report
Loan candidates are judged by their credit scores. Your credit report will be reviewed by the people determining whether or not you are eligible for the loan you are seeking. Also, if you are approved, the interest rate will also be determined by the contents of your credit reports, so you need to review them before they do.
It is common for credit reports to contain errors, and you will want to make sure that you spot them before they are used against you. You will need to take steps to remove or correct anything on your report that is reporting incorrectly, that you believe to be unverifiable or is erroneous, so make sure you check your report well in advance of filing your loan applications. And it is a good idea to check your report at least once a year thereafter.
If you are turned down for a loan, you need to figure out why. Lenders are looking for a history of financial responsibility. They want to lend to someone whom they consider to be a low risk for default. Improve your credit score by correcting the report as mentioned above, making payments on time, paying down debt, and making sure that you are not spending more money than you earn.
Increase Your Odds for Approval
If you are shopping for a car loan or a mortgage, thereare a couple of things you can do to improve your chances for approval. Start by applying with more than one lender. Lenders have different eligibility criteria, so you will want to make sure that you find the one that suits you. Even if you are rejected by one does not mean you will be turned down by others. Don’t worry about the effect of applying to multiple lenders to your credit scores, As long as you keep these applications within a 30 day period, it should be counted as just a single credit inquiry.
Another way to increase your odds of approval is to ask someone to co-sign for you. If a lender knows that someone with good credit is guaranteeing their loan gets repaid ,they are more likely to take a chance on you.
If you would like more information about applying for a loan, give us a call.