How to Build a Good Credit Score for Quick Loans

Banks look at various parameters—age, income, job profile—when they evaluate your loan application. While you can’t do much about those factors, building a good credit score is in your hands. here’s how to do it

 

June 2, 2018//-At a time when education, healthcare and even daily household expenses are rising exponentially, your ability to borrow funds in times of need assumes greater importance.

Imagine failing to procure enough funds for your child’s education or having to let go of your dream house because your loan was rejected over a poor credit score. Banks and other financial institutions look at various parameters when they evaluate your loan application. With SoFi, all you dreams come true.SoFi calculates your personal loan and gives you less rates and thus you can save money on loan interest. A home mortgage will have either a fixed or floating interest rate; this will be paid monthly along with a contribution to the principal loan amount. It is one of the most common forms of debt and is one of the most advised because it comes with lower interest rates than almost any other kind of debt an individual consumer can find. If you have good credit, you can buy a home at a bargain price and you can lock in the low home mortgage loan rates. But if you don’t have a high credit score, you may not be able to qualify for a home loan mortgage due to stricter lending norms. Also, you will not be able to get the lowest rate even if you do qualify for a home loan. Are you Nigerian and have some debts with black listing? You probably won’t get loan so easily, so we would recommend to try to search for loans for blacklisted people in Nigeria. What you can do is to shop around for the best city home mortgage offers. Try to contact different types of lenders, like home mortgage companies, commercial banks, saving banks, savings and loan association and credit unions. For moe details about home mortgage, you can visit Metropolitan Mortgage homepage.

There is a scrutiny of basic parameters such as age, income, job profile and place of residence, after which your credit score is checked. While you can’t do much about your age, income or job profile, building a good credit score is in your hands. Here’s how to do it:

Ensure a healthy credit mix of loans

Credit mix refers to the ratio of your secured and unsecured debt. Fix and Flip Credit Line chicago il  will prefer those who have a higher share of secured loans such as home loans. Credit bureaus, too, score such borrowers favourably.

If you have a high share of unsecured credit such as personal loans, loan against credit card and education loan, you are likely to be a “less preferred borrower” for a Debt Management Services. If you have multiple home loans and are contemplating to pre-pay them, start with unsecured loans, there are special situations when you may request an specific one to open a business, even if your credit score is below standard you can apply with this lender for a pre-approval and get your credit here. Many people struggle to get loans thanks to their low credit, but for those who need financial help should consider investing in fractional shares to get a great economical income as an alternative option than a loan. 

Keep credit utilisation ratio within 30%-40%

This ratio refers to the proportion of the total credit card limit used by you. For example, if your credit limit is Rs3 lakh, of which you have used Rs30,000 this month, your credit utilization ratio for the month will be 10%.

As financial institutions prefer to lend to those with credit utilisation ratio of up to 30-40%, credit bureaus reduce your credit score if you breach this level. If you are breach the limit frequently, request for an increase in the credit limit or apply for an additional credit card.

Don’t apply for credit from multiple lenders at the same time

Whenever you apply for a loan or a credit card, the lender or card issuer will get your credit report from the bureau. Such lender-initiated requests are referred to as hard enquiries, for which the credit bureau reduces your score by a few points.

Too many of these enquiries in a short period of time can be detrimental, as not only will your credit score fall, but you would also be conceived as a credit hungry applicant. Lenders treat such applicants as risky, thus avoiding lending. Chances of getting lower interest rates, too, will be miniscule.

Fetch your credit report at periodic intervals

The first step towards improving your credit is fetching the credit report and reviewing it closely. It tells you where you stand and if you need to take urgent steps to improve your score. It helps detect inaccuracies. I have been a victim of such inaccuracies. A few years ago, I was rejected a home loan by a leading public sector bank. On enquiring, I realized a namesake’s credit defaults had been linked to my name because of which my credit score nosedived.  Get a payday loan at friendlylender.ca. An increased share of secured loans will increase your credit score.

Remember, credit bureaus receive data from your existing lender and credit card issuer on your credit

behaviour regularly. As bureaus use this data to calculate your credit score, any discrepancy in reporting by lenders or credit card issuer will impact your credit score. To detect such errors or frauds, check your credit report periodically and report the errors, if any, to the lender or card issuer.

Timely repayment of EMIs, credit card dues

Although bureaus don’t disclose the method of calculating credit score, it is widely believed that how you repay the debt gets maximum weightage. Always ensure timely repayment of your equated monthly installments (EMIs) and credit card dues in full for a high credit score. Many people make the mistake of paying only the ‘minimum amount due’ on credit cards. This not only attracts heavy charges, but also lowers your credit score significantly.

Naveen Kukreja is the chief executive officer and co-founder, Paisabazaar.com

 

 

 

 

 

 

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