Seeking a Loan? Five Steps to Increase the Odds of Your Acceptance

11.02.2012 | Author: HermanA | Posted in Loans
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Anyone with a source of income and okay credit could land a loan in the past, but things have changed substantially. The days of deciding to purchase a home and getting instantly approved for a sizable loan are over for most borrowers. The application process for all varieties of loans is getting more detailed and difficult to get through. Lenders are simply no longer willing to accept big risks. While it is not as easy to get a loan approval today, it is far from impossible.

If you are in need of loans to go back to school, purchase a new home, or upgrade to a hybrid vehicle, there are some steps you can take to increase your chances of getting accepted. You want to get accepted for a loan, but that loan must have terms that work with your financial situation. No one can guarantee that you will be accepted for a good loan, but there are five things you can do to increase your chances.
Check Your Credit Reports
The first thing you should do is secure a copy of your credit report from all three credit organizations. Make sure you get a copy of all three credit bureau reportings. Some creditors deliver information to all agencies, but many only report to one or two that they prefer. It is common for all three of the different credit reports to vary in some manner. Also, this means your FICO score could change with all three credit bureaus.
When considering you for loans, banks and lending firms will consider all available data and all available FICO scores. You want your scores to be as impressive as possible, but as a general guideline you are aiming for FICO scores above 700. When you drop below 700 even for one FICO score, you appear to be a much higher risk for lenders.
Enter disputes to change any inaccurate entries on your reports. If you have unpaid records for less than a hundred dollars, pay them in full if at all possible. You can also secure letters proving you have paid off these debts. That may help develop trust with lenders.
Get Rid of Credit Card Debt
To increase your chances of approval, start paying down credit card debt already established. Lenders look for people who have more open credit than maxed credit. This means that your account balances are very low, and you have some available credit that you are leaving open. You must maintain those open lines of credit, but you must also pay off the balances.
Make sure your available lines of credit remain open to you. If you have to make inexpensive purchases and pay them off right away to keep accounts open, do it. Low balances tell lenders that you have been given lines of credit and are responsible enough to keep it under control. Higher credit card balances are a sign of inappropriate use of credit or borrowers living off of credit lines beyond their means.
Stop Applying for Credit Cards
Every time you apply for credit, it shows as an inquiry on your credit report. They can see the other inquiries to your credit report and determine you are shopping for credit lines. You may not be approved for all of those credit cards, but it doesn’t do anything to make lenders trust you. It is best to reserve the application for lenders that you really want to work with .
Keep Your Day Job
The longer you have been at a single job, the better off you are going to be when asking for loans. It is less risk for lenders to loan to someone with a long work history. Be ready to answer questions about your employment status, since lenders want to make sure you are able to keep up with the loan in the long run.
Put Your Cash on the Line
If possible, increase your down payment for this purchase. If you are able to put some of your own hard-earned money down, then lenders feel better about putting their own money down. Why should anyone invest in your needs, when you are not able to invest in yourself?
If you need some time to work on some of these objectives, you are in the same boat as most others. That slows down the process of sealing the deal you want to make, but it could save you from getting denied the first time you apply. How you come off on paper is important, so take the time to get your finances in shape. You do not want lenders to view you as a risk.

If you are in need of loans to go back to school, purchase a new home, or upgrade to a hybrid vehicle, there are some steps you can take to increase your chances of getting accepted. You want to get accepted for a loan, but that loan must have terms that work with your financial situation. No one can guarantee that you will be accepted for a good loan, but there are five things you can do to increase your chances.
Check Your Credit Reports
The first thing you should do is secure a copy of your credit report from all three credit organizations. Make sure you get a copy of all three credit bureau reportings. Some creditors deliver information to all agencies, but many only report to one or two that they prefer. It is common for all three of the different credit reports to vary in some manner. Also, this means your FICO score could change with all three credit bureaus.
When considering you for loans, banks and lending firms will consider all available data and all available FICO scores. You want your scores to be as impressive as possible, but as a general guideline you are aiming for FICO scores above 700. When you drop below 700 even for one FICO score, you appear to be a much higher risk for lenders.
Enter disputes to change any inaccurate entries on your reports. If you have unpaid records for less than a hundred dollars, pay them in full if at all possible. You can also secure letters proving you have paid off these debts. That may help develop trust with lenders.
Get Rid of Credit Card Debt
To increase your chances of approval, start paying down credit card debt already established. Lenders look for people who have more open credit than maxed credit. This means that your account balances are very low, and you have some available credit that you are leaving open. You must maintain those open lines of credit, but you must also pay off the balances.
Make sure your available lines of credit remain open to you. If you have to make inexpensive purchases and pay them off right away to keep accounts open, do it. Low balances tell lenders that you have been given lines of credit and are responsible enough to keep it under control. Higher credit card balances are a sign of inappropriate use of credit or borrowers living off of credit lines beyond their means.
Stop Applying for Credit Cards
Every time you apply for credit, it shows as an inquiry on your credit report. They can see the other inquiries to your credit report and determine you are shopping for credit lines. You may not be approved for all of those credit cards, but it doesn’t do anything to make lenders trust you. It is best to reserve the application for lenders that you really want to work with .
Keep Your Day Job
The longer you have been at a single job, the better off you are going to be when asking for loans. It is less risk for lenders to loan to someone with a long work history. Be ready to answer questions about your employment status, since lenders want to make sure you are able to keep up with the loan in the long run.
Put Your Cash on the Line
If possible, increase your down payment for this purchase. If you are able to put some of your own hard-earned money down, then lenders feel better about putting their own money down. Why should anyone invest in your needs, when you are not able to invest in yourself?
If you need some time to work on some of these objectives, you are in the same boat as most others. That slows down the process of sealing the deal you want to make, but it could save you from getting denied the first time you apply. How you come off on paper is important, so take the time to get your finances in shape. You do not want lenders to view you as a risk.

If you are interested in further information about free credit reports before you decide on a loan, please check out our website at gettingacreditreport.net.

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