Lenders need to be sure of your credit worthiness and ability to repay before they can approve you for credit.
When you apply for credit, the lender will check your debt history, credit score and income to determine whether you are eligible or not. You need to be as outstanding as possible financially to get approved. Below are tips on how to improve your chances of being approved for credit by any lender:
- Keep your debts low- Make sure that your current debt level is low. A lender may be reluctant to give you additional credit if you have other pending debts. Reduce your debt to increase your chance of being approved for credit.
- Pay debt on time- A lender is most likely to approve you for credit if you can repay it on time. Avoid defaulting your debts, if you cannot repay for one reason or the other, talk to your lender on time, and agree on a date when you can repay. You want your credit rating to be at its best.
- Improve your credit score and report- The lender will judge your credit worthiness based on your credit report. Check your credit report regularly to ensure that all the details are correct and up to date. Correct any errors you find. You can improve your credit score by repaying your debts and bills on time, managing your credit cards properly, closing unused accounts etc. Your credit score is one of the key determinants for credit approval.
- Make sure that you qualify for credit even before you apply- Lenders normally do a thorough background check before approving credit. Make sure that you meet the minimum requirements in addition to ensuring that your credit score, debts, and finances are in order.
- Know how much credit you can borrow- Some lenders will dismiss your credit application if you borrow an amount above what you can afford. The lender will check your income and expenses and determine whether you are capable of paying back the money. Look at your income and expenses before approaching a lender and know the maximum credit you can borrow. Borrowing more than you can afford may disqualify you
Getting approved for credit is normally not easy, especially if you have a low credit rating, or are in debt. The good news however is that there are things you can do to improve your chances of being approved.
Check your credit score before the lender does and pay off your bills and debts in time. Do your homework to find out how much credit you can afford, by following the above- mentioned tips, you will increase your chances of being approved for credit no matter the situation you are in.