Financial hurdles beset many people, and reputable lenders know this. Lenders understand that people recover from bad credit, and they are prepared to lend money to those in this position. Unfortunately, though, many such applicants make key errors in their applications, which results in those applications being rejected. Here are five ways to boost your chances of approval.
1. Full and Complete Disclosure
Be completely honest in your application. Many applicants attempt to improve the perception of their true financial position by making untrue claims in their application, or by leaving out key items that they believe make them look bad. Kyle Rhys from www.badcreditcarloan.com.auexplains why this is a bad strategy: “Lenders need to trust you,” he says. “Trust is absolutely vital to approving any loan application. So, no matter how bad you think your true position is, or how poor your history might look, tell the absolute truth. However poor you believe your history to be, the lender has seen worse.” Mt Rhys says getting an independent professional’s assistance can make all the difference to presenting an application that a reputable financier will understand and approve.
2. Fix your Credit file
It’s essential to review and repair your credit file. Mistakes are often made in individuals’ credit files, and these can reflect poorly on applications. If yours has errors in it, you can easily contact the organizations that have made the entries in your file, and discuss the matters direct with them. For more information on accessing your credit file, search on Google for a free credit reporting website.
3. Demonstrate solid employment
Lenders invariably look for a stable employment history – because stable employment demonstrates stable income, which is necessary to service any debt. Kyle Rhys says lenders prefer to see longer periods with fewer employers. “If you can demonstrate you can hold down your job for significant periods, rather than jump often from job to job, with gaps of unemployment between, that will go a long way to getting your application approved.”
Additional debt, in the form of a car loan, will require spare income capacity to service. If your bank records show that you can save regularly – even if it’s only a small amount each week, this will be evidence that you have that income capacity required to service the new debt.
5. Manage Debt responsibly
Pay attention to your existing debt and loan obligations. Ensure repayments are made on time, and in the case of credit cards, make sure the amounts repaid are greater than the minimum monthly payment required.