The top factor that lenders look at before giving you cash is your credit score. With a good credit score, you can qualify for a great loan quickly and easily. Credit bureaus calculate your credit score based on your credit record.
Your payment history with student loans, car loans, credit cards and more affect your number. Your score is a number between 300 and 850. Lenders are more likely to give you a low-interest rate if you have a high credit score.
A great credit score is an indication that you are a reliable borrower.
If your credit score could use some help, here are some tips for increasing your number.
· Payment history – Make payments on time. Having a late or missed score can lower your score. However, your record is not permanent. Any late or missed payments will fall off your credit history after 7 years. If there is a mistake on your credit report, you can call to have the negative remark removed, which should increase your overall score.
· Credit utilization – Your score improves when you use less and less of your total available credit. For example, if you have $400 on a credit card with a $1,000 limit, you are using 40 percent of your credit.
Lenders prefer if you are only using 30 percent or less of your available credit.
· History length – Your score increases over time as your credit history becomes longer. Credit bureaus look at the age of your oldest and youngest credit count and the average of all your credit accounts.
If your credit is not the best, you aren’t out of options. Luckily, you can still get a personal consolidation loan for poor credit holders. Many lenders offer personal loans specifically for those with poor credit.