Need a Loan? 5 Ways to Enhance the Odds of Acceptance

Having a decent amount of income and short term credit is no longer enough to secure loans with favorable terms. The days of deciding to secure a home and getting instantly approved for a sizable loan are over for most borrowers. If you do not have great credit and a large down payment, the loan application process is not going to be simple. Lenders are simply no longer in a position to accept big risks. Most people now find it harder to get loans they apply for, but most will eventually get accepted.

The key to winning the loans you want for a new car or home is to take steps to make yourself look as stable as possible to lenders. You do not want to accept any loans unless they offer reasonable terms. No one can guarantee that you will be accepted for an immediate loan, but there are five things you can do to increase your chances.

Check Your FICO Scores

Never apply for a loan before checking your credit report. There are three alternative credit bureaus, so make sure you get a copy of all three reports. Not all businesses will report to all three credit bureaus. It is commonplace for all three of these credit reports to vary in some manner. Even more important, this means your FICO score could be different with all three credit bureaus.

Most loan organizations and banks will check with all three credit agencies when deciding if you are well suited for one of their loan programs. Ideally, your FICO scores will be at least in the 700s, though you want them to be as high as they can be. Even if you have a single FICO score less than 700, your chances of being viewed as suitable for a loan decrease significantly.

Closely analyze all of your reports and dispute any inaccurate information. If you have small unpaid debts, pay them off and request the credit bureaus be updated. If the credit reporting agencies cannot be updated immediately, ask for something in writing stating the debt has been paid in full. Revealing those letters to lenders may give them more faith in you.

Eliminate Debt

To improve your chances of approval, start paying off credit card debt already established. Ideally, you should have more uncharged or free credit than maxed out credit cards. The best reports feature lines of credit that are not maxed out, and which have open lines of credit. You must never close your accounts, but you must also pay off the balances.

Never discontinue your accounts! You may need to make regular purchases on some accounts to keep credit lines open, but you must pay them right back off to maintain a low balance. Low balances tell lenders that you have been given loans and are responsible enough to handle it. High balances reveal the opposite, by hinting that you are spending beyond your means or are not using credit responsibly.

Pass Up Credit Opportunities

Lending agents can see how many other credit cards you have applied for in recent months. When a lender notes that you have recently applied to many different lenders for credit, they know you are shopping around. You typically will not be approved for all of those credit lines, but it doesnt do anything to make lenders trust you. Do not try to get every card that comes your way, or you could hurt your chances of getting the line of credit you really do want.

Do Not Quit Working

It is important that you understand how a reverse mortgage works. Invest a little bit of time and read up on them. Its likely that you learn that a reverse mortgage is exactly the thing you need.

Lenders prefer to deal with people who have held one full-time job for many years. Those with lengthy work histories are seen as less risky than those who change jobs frequently or seem to have difficulty keeping a job at all. Be ready to answer questions about your employment status, since lenders want to establish that you are able to make good on the loan in the long run.

Put Your Dollars on the Line

Finally, offer up as much of your own money toward this purchase as possible. If your down payment is impressive, then lenders feel comfortable putting their own money into the mix. If you refuse to invest in yourself, why should they?

It must be noted that most people will have to put off applying for loans while they work on one or more of these points. If you take the time to get yourself together in these ways, you could eliminate the risk of a denial the first time you apply for loans. It is always in your best interest to look into these preparations before applying. You will make yourself look much less risky if these things are in order prior to applying for a loan.

How does a reverse mortgage work is a common question nowadays. Within these tougher times, everyone is searching for an approach to make the ends meet. If you are in a position that is feeling tight, and you are able to use a little financial aid, check out a reverse mortgage and determine if it fits your family needs.

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