If you are looking to get a new loan, you are probably getting the chance to review your credit, possibly for the first time. In order to get the loan that you want, you are going to want your credit score to be as high as possible. This will not only get you the loan, but it will get it to you on the terms that you want to get it on. The following are some ways that you can improve your credit score, improving the chances that you will be approved for the loan that you want.
*Decrease your debt overall. Your debt to income ratio is a big factor in your credit score. Pay off as many of your debts as you can. If you can’t pay them off completely, pay them down so that the balances are as low as possible. Focus first on any unsecured debt that you have.
*Carry twenty-five percent balances on your credit cards. Pay down the amount that you owe on them until you are right around this twenty-five percent mark of the total credit line. This will allow you to still have the accounts and therefore, be building credit, but it will indicate that you are not living your life dependent on the credit.
*Increase your income, if possible. The higher your income, the less your debt to income ratio will be. Maybe you can get a pay raise at your current job, or maybe you could take on secondary work to make a bit more each month.
*Stay at your current residence. A good rental or home ownership history will be a factor that is shown on your credit report.
*Stay at your current job. This will show a prospective lender that you have a sense of responsibility and that you are likely to remain employed, therefore able to pay back the loan.
*Check for errors. Order a copy of your credit report from all three of the major credit reporting agencies. You are entitled to one per year at no charge. When you receive the report, go over it very carefully. If you see things there that are inaccurate or even questionable, take care of it immediately. Call the company number that is listed and dispute anything that is not truly yours. Be sure that inaccuracies are removed from your credit report.
*Pay bills on tme. A history of payments that are made in a timely manner will bring your credit score up significantly.
*Pay more than the minimum amount due, when possible. Even a few extra dollars paid each month will look good on your credit report and will also lower your debt load.
Improving your credit score will allow you to get loans with lower interest rates and payment plans that are suitable to you. There are many ways that you can work to bring that important number up and when you do, you will end up saving money by getting better loan terms. Start with taking care of the above items, as many as possible, and then, you can see your credit score improve, along with your chances of getting that loan.