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Articles » Low Credit Score Loans | | Low Credit Score: How to Make Your Loan Application More Attractive To Lenders? |
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When you’re filling out an application to get a loan with a low credit score , you should try to put yourself in the position of the lending institution that you are asking for the money. What are they looking for to determine whether or not you are credit worthy? There are determining factors that are pretty much universal to all lending agencies, whatever their credit score threshold is. How much can you afford to borrow? Can you make your payments on time? Do you have a history of defaulting on payments? These are all questions that will be asked so you should provide the answers on your application form.
Your credit score is compiled using the information on your credit report. It’s the negative information on payment history and public record accounts that brings your score down. You can improve your loan application and maybe add a few points to your score by requesting that the credit bureaus add any positive payment histories you might have available, particularly recent histories. If you have open collection accounts, either pay them off or make your loan a consolidation loan to pay them off. The intent to clear up your credit is viewed favorably by most lenders.
Another important point to remember in the application process is to list all of your assets. Your job, any savings, and the stability of your living situation are all assets. Again, put yourself in the place of the lender. They’re going to ask if you have a steady job, have any money in the bank, and how long you have lived at your current address. You should also add in any utility accounts and a landlord reference who will state that you pay your rent on time. Letters or statements attached to your application also help.
Are you a good credit risk? Your low credit score says that you are not. So how do you convince a lender that you are? Use common sense. If someone came to you and asked for money, what would you need to know before you said yes?
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