Many of us may have faced financial\ninstability at some point in time. Loans are a good option when you are going\nthrough financial instability and avoid borrowing money from your friends or\nrelatives. <\/p>\n\n\n\n
Many factors contribute to the loan approval\nprocess such as credit history, monthly income, capacity to repay etc. <\/p>\n\n\n\n
Many loans are rejected based on the bad\ncredit score of individuals. If you have also been turned down for a loan\nbecause of your credit history, then this blog will help you to improve your credit\nscore and be eligible for a loan:<\/p>\n\n\n\n
A credit score is simple indicators defining\nyour creditworthiness and repayment capacity. There is no specific indicator of\ncredit score that a lender uses while deciding your loan amount or approval.\nThere are credit reference agencies (CRA) calculate your credit score and the\nrisk you pose to lenders. These credit\nratings are based on scales such as excellent, Good, Fair, Poor and Very Poor. <\/p>\n\n\n\n
Despite a good credit rating, you may expect\na different treatment from every lender. You may be rejected by one but\naccepted by another as every lender has his own measures for deciding. The\nfollowing ways can be of your help to improve your credit score:<\/p>\n\n\n\n
To maintain a good credit score, ensure to\ncheck your credit report at least once a month to update and check whether the\ninformation entered is correct. <\/p>\n\n\n\n
Keep a regular track of the information being\nadded to your report. You should check the information that all the three\nagencies (TransUnion, Experian and Equifax) have about you.<\/p>\n\n\n\n
You have the right to get your credit report\nfor free from these agencies. Once you have checked the report, make sure to\nrectify all your information to avoid any adverse effect on your future credit\napplications. <\/p>\n\n\n\n
Voting is the right of every citizen, and it\nshould be exercised. It is Make certain to register yourself on the electoral\nroll if you want to improve your credit score. <\/p>\n\n\n\n
Your electoral roll has all your necessary\ninformation such as your address and other identity proofs. These documents are\ncheck by lenders to authenticate your address and other identity checks. <\/p>\n\n\n\n
As per the Experian, the largest CRA, your\nvoter registration can help you score as much as 50 points. Also, the time\ntaken to register yourself is not more than 5 minutes. Hence, registering to vote is a good option to\nhelp yourself get the required finance. <\/p>\n\n\n\n
Make your rental payments count as they will\nfacilitate in getting loans. As a tenant, you can make these regular payments\ncount into your credit report via rent reporting platform as it will improve\nyour credit score. <\/p>\n\n\n\n
You should ask your landlord to report your\nrent under the free scheme called The Rental exchange that will ultimately\nreflect in your credit report. <\/p>\n\n\n\n
You can also choose to self-report via\nCreditLadder or Canopy. Reporting your rental payments on time in your credit\nreport will help to boost your credit score. <\/p>\n\n\n\n
Once you apply for credit, your lenders will\nperform a background check for your eligibility. Many lenders perform a \u201cHard\ncredit\u201d search that will leave impressions on your credit file and will be\nvisible to others. <\/p>\n\n\n\n
To avoid this, you can ask your lenders to\nperform a \u201csoft search\u201d rather than a hard search. This can let you know about\nthe interest rate you will be getting and also will clarify rejection or\nacceptance of your application without being visible to others. <\/p>\n\n\n\n
Due to the footprints of hard search, many\nlenders offer soft search on mortgages, loans and credit cards. At times, many lenders require no credit\ncheck depending upon the type of the loan. But mostly, lenders perform a\nrigorous credit check. <\/p>\n\n\n\n
Go slow and steady. If your credit\napplication has been turned down recently, do not apply for another loan or\ncredit card immediately. <\/p>\n\n\n\n
Take some time in between. Applying\nimmediately may not send the right picture, and it may suggest that you are in\nfinancial difficulty. <\/p>\n\n\n\n
The tip is to take a gap of 6 months. If you\napply for another credit card or loan in a gap of 6 months, it will help boost\nyour credit score by 50 points. <\/p>\n\n\n\n
Spreading out your credit card and loan\napplications by 12 months may have a positive impact on your credit report. <\/p>\n\n\n\n
Your partner\u2019s bad credit may affect your\ncredit rating if you plan to take out a joint financial product with them. A\nfinancial association is when you open a joint account with them. <\/p>\n\n\n\n
Since lenders weigh every factor while\nconsidering your application, this may harm your chances of approval as their\nfinancial situation could affect your ability to repay. <\/p>\n\n\n\n
If you ever had a joint financial account\nwith someone you are no longer associated with, it is better to disassociate\nyourself. <\/p>\n\n\n\n
You can ask all the CRA\u2019s to break your link\nwith that person in their credit reports. Once it is done, it will not affect\nyour credit situation in future. <\/p>\n\n\n\n
Repayment plays an essential aspect of\nmaintaining a good credit score. If you repay your loan on time and within the\ncredit limit, you are in the good books of CRA\u2019s. <\/p>\n\n\n\n
This will convince lenders for your repayment\ncapacity. You should avoid missing a single loan or credit repayments to be\neligible for credit again. <\/p>\n\n\n\n