Your credit score and credit history is like your financial resume. It lists all of your current and past debt transactions and how you managed them. If you have fair to good credit, it should be easy for you to qualify for a loan.
These are the levels through which credit scores are measured:
- Excellent: 781 – 850
- Good: 661 – 780
- Fair: 601 – 660
- Poor: 500 – 600
- Very Poor: 300 – 499
However, even if you don’t have excellent credit, you may still get approved for a loan.
Lenders also have multiple loan types, and you can qualify for ones that fit your credit and income. Here are some tips and tricks to help you qualify for a personal loan:
· Apply for a secure loan. A secure loan is one that requires collateral. Putting up collateral, such as your car or home, makes lenders feel more protected. You keep your home and car as long as you make your monthly payments. Even with good credit, a secure loan may lower your interest rate.
· Apply with a co-signer. The co-signer is partially responsible for paying back the personal loan. If you have bad or no credit, a co-signer with good credit can help you get a low-interest loan.
· Prepare for the application. The lender may want to see financial documents, like paychecks and bank statements, that prove you can repay the loan. Having these on hand when you apply makes the process faster.
· Apply to only one loan. Each time a lender checks your credit, your score drops some points because of the hard inquiry. Do not apply to multiple lenders at once. Instead, do your research and apply for the one that best suits you.