Have you been considering buying a new car? Maybe purchasing your first home? If so, there are a lot of angles to cover. While having enough money for a down payment is one of the biggest necessities for financing, it’s just part of the determining factor for approval. Lenders will look closely at your credit score and use that number, along with other things to decide if they will lend you money and at what interest rate your loan will be. If you have little to no credit, it can be challenging to get approved for a large purchase like a home or truck. Here are a few tips you may wish to follow ahead of time before you apply for a new loan.
Make All Payments on Time
It’s very important that you make all of your monthly bill payments on time, this includes your household bills and utilities. Many businesses, not just credit card companies, are using the three main credit bureaus, TransUnion, Equifax, and Experian to boost customer payment morale. This means these companies are tired of customers defaulting or paying late regularly, therefore they threaten to report late payments to the credit bureau. If you’re having trouble paying your household bills as well as your credit cards or car payments, consider getting a short-term installment loan. There are typically minimal requirements for approval and all you need is a valid checking account and a steady, reportable income. If you’re in need of a new mortgage or you have to lease a new vehicle, don’t sacrifice your credit by making late payments. Getting a short-term loan, like one from Blue Trust Loans quick personal loans, will help you stay on your feet and avoid the long-term effects of high-interest rates and loan rejections.
Pay off Old and New Credit Cards
Do you have some old credit cards from several years ago that you just quit paying on? If so, this can do more than just ruin your credit score. It can actually put your existing financial and personal livelihood at risk. Old debts can come back to haunt you by means of a bank levy, property seizure, and garnishment of wages. Some collection agencies will even go after your property and place a lien on it. The only way to stop these practices from being enforced is to pay the amount owed or file for bankruptcy. Since you’re trying to build or rebuild your credit, you don’t want to file for bankruptcy, only as a last resort. It’s important to directly contact these lenders and offer them a settlement agreement for the past due amount. If you can, it’s also wise to pay off your existing loans as quickly as possible. This is another way to build your credit and show new lenders that you’re taking responsibility for your credit history.
Contact the Three Main Credit Bureaus
Before venturing out to purchase a new vehicle or talk to a realtor about a new home, you need to run your own credit report to see where you stand. Even with little to no credit history, there can still be some discrepancies. If you notice something that shouldn’t be there, a new account that you didn’t open or an old credit card that you paid off years prior, contact the credit bureau that’s reporting it. It could be a simple mistake or a legitimate false claim. The credit bureau will handle the investigation and get back to you within about 30 days. In the meantime, keep records of all of your transactions regarding the late payment or closed account, if you have it. You can still proceed with the loan process but will have to verify your information.
Request Credit Alerts
It’s important to stay on top of your credit rating and report, even if you’re just establishing your credit. Utilizing an online credit monitoring service is a good way to avoid the pitfalls of surprises when you’re meeting with a loan officer. Being alerted of potentially fraudulent activity can save you time and hassle before your bank account is wiped out or your credit limit is exceeded. Even if someone else has stolen money from your account, you’ll still need to protect your pending transactions. While most banks will waive fees if you’re not responsible for the transactions, contacting a payday loan alternative company will be the fastest way to get a cash advance and cover the negative balance. This assures you still have your bills paid while the issue is being resolved with authorities and your financial institution.
Tiny problems now can turn into big financial problems in the future. Take control of your money and make sure everything is paid off and paid on time. This will make the process of obtaining a large-scale loan when you’re ready all that more easier.