I have some exciting news to impart to all of my readers who have been turned down for loans in the past; I may have found the perfect solution! If you are one of the thousands of people who are confused by personal loans, you aren’t alone. However, it is not always the subject of interest rates and loan terms that cause the most significant problems. Instead, it is the act of applying for and being approved for a loan that tends to be a major headache for most people.
Becoming Aware of Lenders Grading Criteria
You may have done your homework and worked out that those monthly repayments that are suggested by the providers are in fact manageable, with your current financial circumstances. But, have you considered the grading criterion that each loan company will base your application on?
From the state of your credit score to your current employment stability, monthly expense obligations and even the intricate history of your overdraft use, the act of applying for any type of loan is always involved.
Fortunately, there is help at hand with a new startup loanable. Loanable is an ingenious concept whereby you merely fill in one straightforward application form which they then use to match you up with the relevant lender. More importantly though is that they do not turn away those with lousy credit, thus considering all applications on individual merit.
I would personally urge you to take a step back and spend some time assessing your overall financial circumstances and ways of improving your chances of a personal loan before you apply. This way, you ensure you stand a better chance of gaining the best loan type and rates for your specific needs.
Understanding the Effects of Your Actions on Your Credit Rating
Though we are all probably aware that not paying our bills on time will possibly make a dent on our credit files, how many of us truly understand the long-term impact of how our everyday actions affect our credit score? You may think that missing the odd payment here and there won’t make too much off a difference, but creditors want to see a history of bills regularly paid on time.
For example, were you aware that the longer you take to pay off your credit card bill, the more damage you inflict on your score? Not only that, how many people regularly utilize those overdraft facilities without stopping to think about how this reflects on their credit rating? Though having an overdraft isn’t an issue, if your bank makes repeated requests to get your account out of this negative balance, it could just end up as a credit scoring matter over time.
Take some time to look at what lenders search for when assessing your credit rating. Experian offers an extensive list of the factors that affect your credit score which may throw up some suggestions that you had never considered to have had any relevance before now.
Considering the Impact of Continually Applying for Credit
This, I believe, is something a vast number of us are guilty of doing. You see an advert for a better credit card, and you click the box that tells you it only takes a minute to apply. Or, you spot a Buy Now Pay Later Sofa deal at Christmas, and you head in store to apply. While the company may tell you that you are under no obligation at this point, by the time you have made up your mind, your credit report has already been run.
Alternatively, you may believe that you are only searching for a quote from a loan company who say they would be willing to consider your application but, by the time you realize this isn’t the case, your credit files have unfortunately been marked. Ultimately what you thought was a simple loan search has in fact affected your credit rating.
Becoming Wiser to How Companies Perform Credit Checks
What many organizations fail to tell you is that each time somebody runs a credit check on you, you automatically reduce your credit score by around five to ten points. While that number may not initially sound too damaging, think of it another way. Say you search for a loan provider, apply for a new credit card and then purchase a sofa on credit all in one month. That means a possible eye-watering thirty points knocked off your credit score in just a few weeks. When you look at it this way, you begin to see things in a new light!
This is also another excellent reason for taking advantage of companies such as Loanable as they only require one application form from you but will search all necessary providers without causing further upset to your credit rating.
Learning How Your Background Shapes Your Loan Application
I know many people who look at the monthly repayable amounts that most loans usually demand, and they automatically think they are eligible on that basis alone. Yet, it can be a bit of a blow when they discover this calculation is not the same as the lenders when it comes to ensuring the loan will be adequately paid back. You see, it isn’t all about your income that they consider, it is also those pesky corresponding expenses that unfortunately say a lot more when it comes to your loan application.
You may be wondering at this point how anybody manages to get a loan based on this evaluation, and I completely understand your point. But, if you can work on reducing your monthly expenses, you sway the ratio to your advantage. The fewer obligations you have, the healthier this rate becomes to potential lenders.
Changing Your Overall Financial Outlook
Overall, the key to getting the best loan deal possible is to try to work on improving your current financial situation. Think about it as being that every economic step you take, there is a consequence for your credit rating every time.
When you get into the mindset of seeing your situation from this point of view, you are more inclined to approach it and ultimately look at your creditworthiness from a lender’s point of view. Understand this, and all that remains is to improve your future scoring.