Take steps today for better prospects.
There are many different factors that lenders take into account when it comes to judging whether a borrower is suited to a loan product. These aren’t a mystery so if you’re looking to improve your chances of being approved for a personal loan you have more power than you think to make changes that could result in success.
- Pay off your other debts. The fewer debts you have the more appealing you will be to a potential new lender especially if you have some high cost loans such as a bad credit loan or any loans with no credit check.
- Make sure your application has all the information. In some cases, applications can be refused simply because they don’t have the required information attached.
- Avoid lots of hard searches on your report. If you’re looking for a new personal loan and you’re refused by one lender don’t immediately apply to another. It’s much better to take the time to work out why you were refused and then to wait until you can correct any issues before applying again. Multiple applications look a little desperate and can put lenders off.
- Disconnect your credit report from former partners. When we’re in relationships and sharing bank accounts, or living with other people and paying bills together, our credit reports often end up linked. If you then go your separate ways you could still find that your financial histories are connected. This will affect your chances of success when it comes to personal loans if your ex-partner or housemate doesn’t have a great credit score. You can improve your score – and your chances of a successful loan application – by getting a notice of disassociation to split them up.
- Make sure you earn enough to borrow. Different lenders look for different incomes when deciding whether or not to lend to someone – it’s always worth asking the question about minimum income requirements before you apply, to improve your chances.
- Look for bad credit loans if necessary. If you don’t have a great credit score then that doesn’t have to mean you’ll never be approved for a loan. There are lots of different types of loans that are ideal for anyone with bad credit – and once you’ve been approved for this type of loan, making repayments on time could help you to improve your credit score for the long term too. Payday loans, homeowner loans and guarantor loans are three types of bad credit loan that might be worth looking into.
- Deal with your existing bank. There is often some flexibility for potential borrowers who might be having problems elsewhere if you apply to the lender you already bank with. If you’ve got a good customer history with the bank then they might be more willing to approve a personal loan than a lender you have no history with at all.
- Accept a higher APR. If you’ve been met with rejection for a number of personal loans it could be because you don’t have a great credit score or your income is low. If that’s the case then you might be better off accepting that you need to apply for a higher APR loan that you’re more likely to be accepted for and then paying that off responsibly to improve future prospects.