Financial institutions and licensed moneylenders may accept your loan application even if you have a poor credit score. However, you will need to put in the necessary effort for them to approve your loan application. The process is not as simple as approaching a licensed moneylender and signing several documents.
In this article, we will share the essential steps and efforts to get your loan application approved, despite having a poor credit score.
1. Collect Your Personal Details
To know the chances of your quick cash loan application approval, you need to gather your personal and financial records first. Collect your credit transaction reports, previous loans (if taken), credit score, and financial documents.
Checking your credit report will not affect your credit score; a regular credit score check is a soft inquiry. However, if you request a licensed moneylender to run a thorough analysis of your credit report, you might end up knocking a few points off your credit score.
2. Improve Your Credit Score
You may want to improve on your credit score before applying for a personal loan. To increase your credit score, you must ensure that you pay off your debts on time, check your credit score for errors, and avoid any hard inquiry on your credit report, until your score reaches a decent and appropriate amount.
3. Consult with the financial institution or moneylender
The requirement for a qualifying credit score may vary, depending on the financial institution or moneylender you choose to borrow from. You can consult with the loan department of the bank or with a moneylender to determine their qualifying credit score.
4. Prove Your Creditworthiness
The reason why licensed moneylenders often hesitate to extend the loan to borrowers with a bad credit history is due to the risks present. The person may not be able to repay the full loan on time.
You can offer a consigner or your income proof to prove your creditworthiness. A consigner guarantees the repayment of the debt on time. If the borrower does not repay the loan on time, the lender can approach the consigner for the compensation. These additional securities will make your loan application appear safer and more reliable.
5. Don’t Get Stuck with Scams
Many lending institutions claim to offer loans to individuals with poor credit history. People who need financial assistance may consider these offers as an ideal solution. However, these lenders may turn out to be impostors. Therefore, you should be alert and careful, never pay a significant fee upfront in the hope that the website will extend the loan without considering your credit score.
Always run a background check to verify the identity and reliability of the platform. You can do so by reading online reviews to check if the platform is licensed. Most licensed moneylenders will seek income proof before accepting your loan application if your credit score is low.
Having a poor credit score might limit your chances with for licensed moneylenders to accept your loan application. The essential steps described above are all ways in which you can use to boost your chances and get your application approved, giving you the option to put the financial foot forward.