Do you need to apply for a fast loan? When you need cash quickly, these can be a valuable resource! One of the best features of these types of loans is that the application process is usually short and easy. This is in contrast to a traditional loan application, which can take weeks or even months to complete. Many borrowers also prefer fast loans because lenders place less emphasis on their credit scores when determining their eligibility.
Instead, they look at other factors, such as their income, to gauge their ability to repay. While this is the case, your credit score does play a role in the process.
If your score is favorable, you might be able to qualify for better terms from your fast loan lender. Today, we’re sharing how to improve yours before you apply!
Carefully Review Your Credit Report
To improve credit, the first step is to request and carefully review your credit report. You can typically request one free report per year from each of the three main credit reporting bureaus. These include:
As you read each report, go over it with a fine-toothed comb. When you do, you might discover some items that seem questionable or even inaccurate. Unfortunately, some details that seem negative might be correct, but this isn’t always the case.
If you have a question about anything you see, reach out to the reporting bureau to challenge it. Note that each report might be different, so you need to read all three of them when you receive them. Some of your credit information might be shared with one bureau and not the others.
Errors to Watch For
Sometimes, something as small as a simple clerical error could affect your credit score in a significant way. This is why it’s important to go through the reports line by line. The most common mistakes that occur include inaccuracies around the following
- Loan statuses
- Loan balances
- Credit inquiries
- Personal information
- Payment histories
This could result in a range of issues, from duplicate accounts and incorrect inquiries to fraudulent activity.
If you notice anything that looks incorrect, untimely, or incomplete, reach out to the bureau. This also applies to data that seems biased or misleading. You might be surprised at the difference one small correction makes!
Look at Late Payments
One element of good credit is paying your debts back on time and in full. If you’ve made late payments in the past, it could be hurting your score.
While you might not be able to get all instances of late payments removed from your credit report, it’s worth reaching out to your creditors to ask. Some may allow you to remove the late payment from your report if you’re willing to write what’s known as a goodwill letter.
In this letter, you’ll describe your history of timely payments. Then, you’ll explain why you were late on the payment in question, and the steps you’re taking to ensure that doesn’t happen again.
Note that the creditor doesn’t have to respond to this letter, and many don’t. Yet, if you have a good working relationship with them and you haven’t had any issues together in the past, it’s worth a try. You could also look into sending a “pay for delete” letter, in which you’ll offer to pay the debt off in full in exchange for the removal of your late payment.
If they’re willing to remove even one late payment from your credit report, it could help you take out a loan more easily.
Lower Your Credit Utilization
In finance, your credit utilization is the total credit balance you’re currently using compared to the full amount of credit that’s available to you. While it might be tempting to max out your credit, it doesn’t help your credit score to do so.
If possible, it’s best to keep your credit utilization ratio at or below 30%. If yours is above this amount, look for ways to lower it. A few tactics you can try include:
- Pay down your credit card balances
- Cut back on your spending
- Pay your balance before your statement closing date
- Avoid adding to your credit card balances
- Request a credit limit increase
Pay Off Outstanding Bills
Do you have any outstanding loans or bills that you haven’t paid yet? If so, they could be contributing to your poor credit. After all, your payment history accounts for a staggering 35% of your credit score!
While you might not be able to tackle all of your loans right now, a few ways to stay on track with your payments include:
- Contact your creditor and request a payment plan
- Consolidate your bills with a balance transfer card and stick to on-time payments
- Ask your creditor for opportunities to negotiate a settlement
If you have the ability to pay back a certain bill in full right now, then you could also look into sending the aforementioned “pay for delete” letter.
Keep Old Credit Cards Open
In an attempt to clean up your credit, you might think it’s wise to close out your old credit card accounts. However, it could be in your best interest to keep them open.
A long credit history comprises 15% of your credit score because lenders want to see that you’ve been responsible with the money loaned to you in the past. The only reasons you may want to close these accounts are if your issuer charges an annual fee, or if the card closes after a period of inactivity.
Access Fast Loans With No Credit Check
The steps above could help you improve your credit score, so you can apply more easily for fast loans in the future. Often, the steps are as simple as reading your reports and making small steps to correct them!
Thankfully, not all fast loan lenders look at your credit score when reviewing your application. This includes TekaLoan! Here, we look at your financial data for the future instead of focusing on your credit history. As long as you meet our application qualifications, you can take the next step!
To learn more and apply today, complete our online form!