When it comes to being approved for a personal loan, sometimes the process feels a lot like being picked for sports at school. Who knows whether you’ll be the lucky one approved first time or the last one standing there when all the lenders have made their choices? Actually, it’s far more scientific than the whim of a teenage sports captain in bad gym shorts. It’s a simple process and you have plenty of options when it comes to improving your chances of being approved.
Choose the right kind of loan
This is fundamental – one of the main reasons for loan applications being denied is simply choosing the wrong type of lending. Things to bear in mind here include the length of time you want to borrow for, how much you want to borrow, what your income is and when – and how – you can repay. From long-term personal loans, to guarantor loans and short term loans, there are many options, and you will improve your chances of being approved by choosing one that is a good fit.
Be realistic about your credit score
First of all, find out what your credit score is. Then, assess it against the averages. Different credit agencies use a different scale but if you’re checking your score with Experian then these levels provide a good gauge of how a lender will see your credit score:
Excellent Credit 760+
Good Credit 700+
Fair Credit 640+
Remember that having had debt in the past – or existing debt now – won’t result in a bad credit score. In fact, you need to have some debt history to show that you’re a responsible borrower. It can be just as difficult to get approved for a personal loan if you’ve never borrowed anything than if you’ve got into trouble in the past.
Match your credit score to your application
Not all lenders demand perfection on the credit score front. Most are now beginning to recognise that you can still be a good loans customer and perhaps have had a few financial problems in the past. For this reason there are some lenders who provide specialist bad credit loans for just such circumstances. There are plenty of apps and websites that will help you to match the score you have to the loan that you need. Find the right one and you instantly boost your chances of being approved for a personal loan.
Keep working on it
If you don’t immediately have success with your applications then wait a while before you re-apply and keep working on your chances. Paying bills on time and working to reduce the debt to available credit ratio that you have will contribute to making you more eligible. If there are any black marks on your credit report try to get them removed – you can contact past lenders to ask them (nicely) to do this. Paying rent on time can also help you boost your credit score and increase the chances of being accepted for a loan. There’s a lot you can do to improve your chances next time around – and remember, if at first you don’t succeed…