Getting a credit card or securing a loan is not easy as one think. Lenders have the option to refuse your loan application. The reasons for this could be because of a poor credit score or no credit history at all. A bad credit score or no credit history points that you are not creditworthy. Unfortunately the credit system in Canada is heavily tilted towards the creditors.
So if you are disputing some charges, the creditors might still send that bills to the collection agency which then hampers your credit score. This issues also affects your credit worthiness. When agencies lend you money, there is a certain risk that you may default and be unable to pay back. Having credit history and a good credit score proves that you pose less of a liability. Here are a few tips to help you secure an approval for your loan or credit card application.
Own a Home
Owning your own home or property not only gives you security, but also gives the lender agency peace of mind. By proving that you own a home, you can easily get loans by putting it forward as a security.
Have Good Debt Load
The lending agency will look at the debt load you carry, so you better take a look at it too. Your credit report will give a snapshot of the how you are managing the debt with your finances. Are you able to make the payments in time? Are you defaulting on your payments? Having a high debt servicing ratio will reduce your chances of getting a loan, so that is why it is important to manage debt.
Chose a Loan or Credit Card Within Your Range
Try not to overreach your financial situation and take a loan which you canât just manage. A lender agency is not going to give you a loan which you canât pay back for. A few credit card agencies such as Thomas Cook have strict requirements which you have to achieve to even be applicable for their cards. The banks and the credit card companies thrive on interest payments which the debtors makes. Most of us get those 0% interest offers which entice people to spend the money they do not have. Once the grace period is over, the interest rate goes up and then it becomes unmanageable. So stick within your range.
Good Credit Score
Think of a credit score as a financial rating of you. It rates how much liability you carry and credit score plays a big role in the decision making of lender agency. By staying financial stable, not defaulting on your monthly payments and having good debt, you get a good credit score. Try to have a credit score over 600 at least. If you can manage a credit score over 700, youâve improved your chances greatly. Good credit score and debt service ratio go hand in hand. If you credit score requires some work go to our web site www.ecreditbuilder.ca and take help. Also read our blog how to improve credit score and also what constitutes credit score.
Without Credit History
If you donât have credit history, how do you get you first credit card? There are several options if youâre in this situation. You can take a secured credit card on which you will have to give a security deposit according to the credit limit. Another option is to get someone to vouch for you and get a co-signer.Yo could also go to www.ecreditbuilder.ca and start working on your credit.
In the end, you have to prove two things to a lending agency â that you are able to repay and you are financially responsible. Do that and youâre on your way to an easier loan and credit card approval.