Understanding and Improving Your Credit Rating (Other Personal Loans)

Member Name: Caeculus

Product:	Other Personal Loans
Date:	21/09/02 (1403 review reads)
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The economy is based on credit. If you don’t have at least an average credit rating, you will find that getting approved for any type of loan, or credit card, will be very difficult - if not impossible.

Here are some things that will determine whether you will be eligible for credit, and shows you what the creditors will be looking for.

The first issue you can’t do anything about, it is your age. Yes, you could lie, but this could be a fatal mistake. With all the networking computer systems in use today, somebody, somewhere, probably has the true story. While it’s only one ingredient, if a creditor catches you in a lie, even if it’s just about your age, they aren’t going to trust the rest of the information you provide either, and you will probably not get the loan.
The best group to be in is 24 to 64 years of age, under 21’s and over 65’s are less likely to get credit.

If you are unmarried, most creditor’s think you’re a higher risk, and again you are less likely to get credit. If you are married, this counts as a bonus, even if you have been divorced, most creditors don’t care (but only if you have re-married).

How many dependents have you? Unlike the government, who give you bigger deductions as your family grow in size, creditors think differently. The thinking is, if you don’t have any dependents you have no attachments, you could skip town, not pay off that loan. If you have up to three mouths to feed, chances are good you can’t pull up stakes and run away. More then three, you could get in debt over your head so you become a poorer risk again, but for a different reason.

Where do you live? Do you own a property, rent, or just pay your parents some keep? These are pretty big factors, and can influence the creditors quite a bit. If you own a house, then the same as above, you are less likely to just run away. Moreover, you have the house to
put up against the loan. Where as if you rent, or even worse, just pay keep to your parents, this doesn’t show roots, and you could run off with the creditors money.

How long have you held your present job? The longer the better. Less then one year at your present employment, again, doesn’t show roots. One to three years counts as a bonus, but anything over that really helps. In addition, is it an unskilled or skilled job? This helps to determine whether you could easily get another job if you become unemployed.

The amount of hours you work, and your monthly income. Obviously, the more money you earn, the better! Most creditors will not loan you money unless you work at least 15 hours per week – otherwise there's not much chance of you being able to repay them. The actual amount you earn per month compared to the rating level the creditors give you, varies from creditor to creditor. It also depends on the part of the country you live in, your type of job, and many other factors.


Are you currently in debt, and if so, how deep are you presently in debt? Up to a certain amount shouldn’t matter too much (depending on your earnings), but if your already in a lot of debt, then this is not a good factor.

A very important aspect to all creditors is your previous credit history. Your previous credit history is your track record, and is a good indicator of how you should pay off debt in the future. All creditors belong to at least one credit-reporting agency, and this is where a lot of information is shared about your credit history. If you have a good credit history with the company you’re seeking the loan from, all the better. Of course they believe their own information more then somebody else’s. So if you paid off a loan with them with no problems, your chances of getting another loan are greatly improved.

Having a saving and or checking account with a balance over £500 helps - if i
t’s not something you just opened a few weeks ago. (It should have been at least a couple years to do you any good.)

All these are points that creditors will look at when evaluating you for a loan, and knowing these factors could just help the outcome of whether you get that loan of not.

Tip:
One way to build a good credit rating is to take out a small loan, pay it off quickly, take out a slightly higher loan, pay that off quickly as well, and so on.
By showing you can pay off a debt quickly (even if it’s only a small debt), will give you a good credit rating, and the next time you apply for a loan, you will be able to take out a higher loan.

I hope this advice helps you with your finances, but please note that it is only a guidance, and I don’t want anyone going out and getting married just because I said it will help them get a loan!

P.s. When applying for a loan, shop around different creditors to get the right deal for you. And remember, there are many reviews of creditors right here on Dooyoo.

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