For any loan application, your credit gets the most important consideration. The better your credit, the higher your chances of obtaining a loan on better terms. Most individuals think, however, that their credit standing is etched in stone and that it won't improve no matter what. Well, think again. Consider taking the following steps to see improvements in your credit standing and your credit score.
Most credit bureaus and lenders will take a very critical look at your payment history to determine risk associated with offering you a loan. Consider making regular, on-time payments to provide lenders with a reason to believe you are a responsible individual who can be trusted with their money. Of course, there are additional advantages to making timely payments -- avoiding late fees, for instance.
The lower the amount of debt in proportion to your total available credit, the more attractive you will come across as a candidate for a loan. Try to pay off as much of your debt as you possibly can. This single step can have a serious impact on your credit standing and your credit score.
Many individuals believe they should close off old accounts (with zero balances). Some lenders may look at this negatively.
Every time you apply for credit, an inquiry is placed on your profile. Too many inquiries within a short period of time may create red flags so be careful to avoid applying for too many loans within a short period of time.
Once you take a loan, make timely payments and demonstrate to lenders that you are a responsible individual who repays loans on time and in compliance with agreed upon terms. This will have an important bearing not just on your relationship with the lender but on your credit profile as well.
It is imperative that you check your credit profile regularly. Fortunately, you can obtain a free annual credit report from the major credit bureaus. Regularly monitoring your credit will allow you to take corrective action should something go wrong.