You’ve got bad credit but you still want some extra cash? Let’s get Nifty! We will give you our top 10 tips for loan approval even if your credit score looks far from great. But there are a few things you can do to improve your credit report and get your loan approved more easily. Some of them need a bit of time and preparation while others can be done straight away. Applying for multiple loans may decrease your chance of approval over time. So be smart and only apply for a fast loan once the Nifty way.
Your credit score is a number that reflects your previous financial decisions based on your credit report. Banks and lenders refer to it when you submit a loan application to get an idea of your previous financial behaviour. Many lenders assess if they believe you will be able to repay your loan based on your previous behaviour (= credit score). However, a credit default or bankruptcy can be stored for up to 7 years even if you paid your debt off and moved on. Therefore, a bad financial decision from the past can affect your financial present and future.
A low credit score indicates to a lender that you may have struggled to repay your bills in the past, while a high credit score means that most likely you made your payments on time and kept a good relationship with money. In some cases, a low credit score can cause a lender to reject your application on the spot. If you want to avoid rejection, keep on reading!
Your loan may get rejected for various reasons. If that has happened to you already, you can always contact the lender to ask for the reason you got rejected for. Feedback may help your next application to be more successful. Here are a few very common reasons for why loan applications are rejected:
Obviously, if you have bad credit, you can’t avoid rejection from every single lender. Some may set the rule not to lend to anyone with bad credit and will reject you, no matter what you do. However, from July 2018, Australia has a new system called Comprehensive Credit Reporting (CCR). It also records positive financial behaviour which could be your key to getting accepted. By accumulating more positive listings on your credit report, you may outweigh the negatives.
It’s important that you are on top of your financial game by frequently checking your credit score. Make sure that you check thoroughly if the information is correct or if there is anything that needs to be addressed. Otherwise, a small mistake could cause your loan application to be rejected. You can get your credit report for free every 12 months and for a little fee any time you want.
If you happen to find any information that is stated incorrectly, you should immediately contact the company in charge. It can take a while until changes show up, therefore, you should make sure to address problems as early as possible.
Your credit reporting agency can fix any errors regarding your personal data, debt incorrectly being listed twice, or a debt amount that’s listed incorrectly.
Your credit provider can fix any mistakes regarding debts that you are in dispute about, that has been stated incorrectly, or that you didn’t receive a notice about.
It may sound contradictory at first, but having no debt at all doesn’t make you more creditworthy per se. Using your credit card and repaying your debt on time shows that you can handle money well and will be used as a positive example of payment behaviour.
Getting a loan or any sort of debt might lower your immediate credit rating. However, consistent repayments on time can have a positive impact on your payment rating. It doesn’t matter if you have any debt as long as you stay ahead of your repayments and make them in a timely manner.
Each lender has their own minimum requirements about income and credit scores. Finding out about them early in your application process will ensure that you are actually eligible to apply for a loan with the lender of your choice.
Most lenders will thoroughly check your financial situation before they give you a loan. This is to ensure that loan repayments are affordable for your budget. If you know your budget upfront you can ensure that you apply for a repayment term that suits your income. Financial advisors suggest that you use no more than 40% of your take-home income for loan repayments.
Your comprehensive credit report does not include any of your utility bills, however, if you forget to pay your bills on time, your provider will report those unpaid bills to a debt collector and your credit reporting agency as a default. Therefore, you should make sure to pay your bills on time and avoid unnecessary listings.
If you show that you can manage multiple loan repayments at once, let’s say a car loan and a personal loan, your credit rating may improve through positive feedback. However, please make sure that you only get multiple loans if you actually need them and can afford to repay them comfortably.
Changing jobs too often may give the impression that you are in a financially unstable position. A long-term employment history provides security for your lenders and leaves the impression that you are stable and financially safe. The chances to get a loan approved will rise if you have been in your current position for a longer period of time.
A debt consolidation loan can improve your finances by repaying your current debt and combining the repayments into a single one. You might get a better interest rate and repaying your old loans may improve your credit rating. However, give it a few months to show up in your report as getting a new loan may lower your rating short-term.
We believe that everyone deserves a fair go. While we do perform a credit check in our loan assessment, we won’t just look at your bad credit. We want to know about your current financial situation and spending habits. That’s why we can offer loans for people with bad credit. Our loans are Nifty and they live up to their name: Submit an easy online application and get your outcome within an hour. We’ve got your back, even if you have bad credit. If you want to learn more about our requirements, learn about how our loans work.
Since founding Nifty in 2016, Bell has continued to make waves within the local financial sector for his continued ambition and willingness to adopt emerging technologies.Read More