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6 Ways to Make Sure You Get the Loan You Need

6 Ways to Make Sure You Get the Loan You Need

Remember in grade school when your teachers would warn you about your “permanent record?” At some point, you most likely figured out that was just a scare tactic to keep you in line until you graduated high school.

Once you entered the “real world,” you were soon introduced to another permanent record of sorts: your credit score. However, unlike the enigmatic permanent record of your schoolyard days, your credit score does, in fact, exist, and absolutely will affect the rest of your life in one way or another.

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So how do you keep it in good standing and ensure that you’re never denied from taking out a car or home equity loan?

Check your credit score often

If you’re gearing up for a large purchase that will depend on your ability to receive a loan, you should keep up-to-date with your credit score on a monthly basis. There are many ways to check your credit or CIBIL score for free, or you might opt for a more in-depth report that will usually come with a fee. While it’s a good idea to keep track of your credit score even if you’re not in the market for a new car or home, you shouldn’t obsess over it; it won’t change more than once a month. Focus less on your actual score, and more on improving it as best you can.

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Keep credit balances low

A lot of people fall into the trap of overspending using their credit cards simply because they can. This sort of irresponsible behavior can lead to missed payments, increased interest rates, and decreased credit scores. On the other hand, using your credit cards only for expenses that will immediately be paid off will show creditors that you are responsible with borrowed money, and they’ll be more likely to offer a loan in the exact amount you’ve asked for. A good rule of thumb is to keep your balances under 30% of your maximum; this shows lenders you have restraint, and will also give you some wiggle room if an emergency arises.

Pay your balances on time

While it’s pretty obvious that letting your bills go unpaid will result in a low credit score, it needs be said that late means late. It doesn’t matter if you’re a day late, or 29 days late: if you’re late with a payment, it’ll immediately be reflected on your credit score. Though it’s recommended that you pay much more than the monthly minimum, you should always pay at least that every single month. This goes back to the last point: if you’re unable to pay off your debt, you shouldn’t have made the purchase in the first place.

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Take care of small debts

As should be clear by now, credits and loans should only be used to make purchases that you’ll be able to pay off in the near future. You should never use a credit card simply because you don’t feel like “actually” paying money out of your pocket at that very moment. If you run into a jam and absolutely must use a credit card for a purchase while you’re out, make it a point to transfer money over to pay off your debt the first chance you get. You don’t want to be late on a small $30 payment because you forgot about it later in the month.

Similarly, don’t spread out these small debts over multiple credit cards. Keep your debts focused into one or two accounts, and close out the rest. There’s no need to tempt yourself with five different credit cards with no balance. Remember: the limit on your card does not represent money you actually own, but it could represent money you owe.

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Flaunt your good standing

It’s possible to request that certain loans be removed from your credit history once they are paid off. However, doing so will usually end up doing more harm than good to your ability to receive a loan. Say you’ve paid off a car loan in full at some point in the past. You made the monthly payments on time, and even paid it off quicker than you had planned. Why would you want to hide this? You want potential lenders to see that you can take out a loan and repay it responsibly. The only time you’d want to hide an account is if it’s in bad standing; of course, getting this history off your report won’t be nearly as easy.

Don’t give out more information than is reported

Credit scores exist for a reason: they give lenders a ballpark idea of how trustworthy you’ll be with their money. If lenders operated on the information given to them by potential borrowers…well, I’m sure you know what would happen. If your credit score comes back lower than expected, don’t make excuses. Everyone has a sob story to tell, so it won’t help your cause explaining that you broke your leg last year and couldn’t work, or you lost everything in a flood and needed to max out your credit cards. Your lender might feel for you on a personal level, but when it comes to business they’ll have to deny you the loan based solely on your low score.

On the other hand, if your score comes back better than expected, keep your mouth shut! You’re right where you want to be, but anything you say has the potential to be misconstrued. Save the happy dance for your living room after you’ve signed the loan papers.

Featured photo credit: JJ / Piggy bank full of dirty coins / Flickr via farm4.staticflickr.com

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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