Did you know that, in Australia, more than 10 million people who want to borrow money do not qualify for a loan? Over 42% of those borrowers use private lenders to fund their needs. It can be disheartening if you are having a hard time getting approved for a loan. There might have been a few moments where you feel like you’re walking the wrong way in life and that you don’t deserve the chance to get out of the hole you’ve dug yourself into. How do you improve your chances of loan approval? Some lending sites like Wallet Wizard might help. What other ways can you employ to build your credit score? This article provides some tips on how to do that.
The need for a loan
A loan can help you bridge a financial gap, solve a problem, or fulfil a goal. Here are some reasons why you may need a loan:
-You’re in over your head.
-Your income isn’t enough to cover your expenses.
-You need money to address an unexpected expense.
-You need money to purchase something you want.
-You’re facing a difficult situation and need help getting through it.
What can you use to improve your chances of loan approval?
You can do a few things to improve your chances of loan approval.
- Make sure your finances are in order. Your lender will want to see that you have a solid financial history and that you won’t be a risk to the bank.
- Make sure your credit score is high enough. A high credit score will show that you’re a responsible borrower and will likely pay back your loans on time.
- Be prepared to provide documentation of your income and expenses. Your lender may ask for proof of your income or specific information about your spending habits.
Tips on how to build a strong credit score
If you want to improve your chances of getting a loan, start by building a strong credit score. Here are some tips on how to do that:
- Pay your bills on time. This will help make your credit score and show lenders that you’re a responsible borrower. If you have trouble paying your bills, work with a credit counselling or debt management program to get your finances in order.
- Keep your credit utilisation low. This means that your total amount of credit (including all types of loans) is no more than 30 per cent of your available credit limit. This is important because it shows that you can repay loans in an emergency.
- Use only approved lenders. Lenders not authorised by the major credit bureaus may have higher interest rates and may not offer the same terms as those provided by the major lenders. Lenders like Wallet Wizard are one example.
- Avoid using borrowed money to buy high-risk assets such as stocks or bonds. Doing so could damage your credit score and increase the amount of money you’ll need to borrow in the future to cover these investments.
- Regularly check your credit score. You can quickly and easily check your credit score for free. You will also find tips to help improve your credit report.
- Keep track of all of your credit card statements each month. Any accounts with missing or incorrect account numbers will damage your credit score and may cause the lender to lower its interest rate or even deny a loan application altogether.
- Pay all bills on time monthly and in full, as required by law. Doing so will help to prevent late payment fees from accumulating over time that can further damage your credit score and increase the amount of money you need to pay.
Conclusion
Hopefully, this article has given you tips on improving your chances of loan approval. By following the advice in this piece and taking the necessary steps, you can increase your chances of securing a loan that will meet your needs and goals. Remember, it’s essential to work with a lender who is knowledgeable about the lending process so that you can get the best possible deal.
