When applying for a personal loan, it is important to keep in mind a number of factors that will make the banks give you a better interest rate. In this article we will give you a few tips that will improve your credit score and get better terms on your personal loans, besides not being rejected when apply.
If you have bad credit score, there are several things you can do before applying for personal loans for better conditions and pay no more than necessary for your borrowed money. Know that there are no magical solutions to repair your credit,it is a task that may require patience and persistence, but understanding how financial institutions calculate your credit score will get better results.
The following tips will help you improve your credit score and consequently better conditions when applying for personal loans:
Pay outstanding loans.
Pay outstanding loans such as credit you’re using on your credit card or small personal loans or quick loans you may have. This will get your credit score will see benefit from having better relationship between the money you have paid and you can borrow. Do not worry about other personal loans with greater wingspan; paying a small portion of these loans consistently will greatly improve your score. What it is important is that the monthly payment for all your debts does not exceed 40% of the profits of the month so that banks do not refuse personal loans you can apply.
Make smart management of your bank accounts.
Do this by spending money on your bank account once you have paid the balance of your credit cards. Do not reduce the credit limits of the cards and that can hurt your score by the ratio of the money you have paid and you can apply for. Do not cancel the old bank accounts, as the history of these conditions can affect your score and if possible open a new bank account. We recommend open online bank accounts with no fees or expenses and can request pre-approved loans once the bank has confidence in you. If possible open a deposit and enter some money in it for the entity to trust you quickly.
Eliminates negative credit reports you have.
Remove all negative reports you can from the credit bureaus. For this you can request a verification report, these negative reports in which the agencies have to verify these data and if unable to do so to remove them. Also you can correct mistakes or spending arrears that are not found in the reports. Finally you should know that you can request to delete the data which are more than 7 years or 10 years in bankruptcy case which appears in these reports if they are not automatically deleted.
Negotiate with credit institutions
Finally it is very important to negotiate with credit institutions to which you must pay, returning the borrowed money in exchange to inform the credit bureaus to remove negative reports. Also, do not forget to pay all personal loan installments you have in time.
If you follow these tips you can increase your credit score and be able to have better conditions to apply for personal loans. As said at the beginning of the article, do not expect the overnight change this score, is a task that requires patience and effort, but performing it to get better terms on your borrowed money and consolidate your debts better conditions and pay less for your personal loan.