| Loans are the single most common source of funding, | | | | the current history of that particular loan. Watch for |
| whether for purchasing a home, financing a business, | | | | items that may not be yours, too. Identity theft and |
| paying off debt, or financing a college education. | | | | identity errors are common, and it's important to |
| Before approaching a lender to see if you qualify for a | | | | protect your credit and remove anything that simply |
| loan, whether your credit scores are ideal or very poor, | | | | does not belong on your report. Once a dispute is filed, |
| it's a good idea to understand as much as you can | | | | the creditor has 30 days to respond to the credit |
| about the factors that a lender will take into | | | | bureau. If no response is received, the item must be |
| consideration when evaluating your situation and your | | | | removed from your credit report, and your credit |
| position as a borrower. Qualifying for a loan can be | | | | scores will increase. Check your name, social security |
| much easier when you have and understand all of | | | | number, and address at the top of each report to |
| these factors. | | | | make sure they are correct. Contact each individual |
| To qualify for a loan, a bank or other lender will | | | | credit bureau with questions and disputes before |
| examine a few key points about you. | | | | determining if you qualify for a loan. |
| 1. Ability to repay the loan. | | | | Qualifying for a loan can also be a matter of being |
| First and foremost, when qualifying for a loan, a lender | | | | honest, regardless of credit scores. If your credit |
| needs to be reassured that you have the ability to | | | | scores dropped due to a divorce, medical crisis, or job |
| repay the money that is borrowed, and that you are | | | | loss, and those issues have been resolved, you can still |
| trustworthy enough to make your payments. Lenders | | | | easily qualify for a loan by explaining these events to |
| want to see your cash flow and if possible, a | | | | the lender. Bad things happen to good people, so be |
| secondary resource, such as collateral. Your credit | | | | honest and explain and detail these issues in writing, |
| scores help them determine if you've paid off credit | | | | and submit that information along with your loan |
| cards and other loans. Lenders check your credit | | | | application to determine if you qualify for a loan. |
| scores to see if you've made your payments on time, | | | | 3. Equity. |
| and to see if you've defaulted any creditors. If you're | | | | Lenders often ask for equity when qualifying for a |
| applying for a business loan, lenders like to see a | | | | loan, especially if the loan amount is large, such as to |
| business that's been in existence for a long time, and | | | | construct a new building for business or purchase a |
| that it's been profitable for a long time. Qualifying for a | | | | home. In these instances, the building or home itself can |
| personal loan or a mortgage is much the same. If you | | | | be the collateral, and equity is built by offering the |
| have a credit history that shows that you've paid your | | | | lender a down payment. To qualify for a loan, be |
| other bills, and you have a steady flow of income | | | | prepared to offer equity, either with a down payment |
| coming into your budget, chances are good that the | | | | or some type of collateral. |
| loan will be approved. If your credit is questionable, | | | | If your credit scores are high, and if you've never had |
| however, it may be of benefit to seek a lender | | | | any financial difficulties, qualifying for a loan should be a |
| specializing in loans for individuals with poor credit. | | | | fairly simple process. If you've had financial challenges |
| 2. Credit history. | | | | or extreme financial difficulties in the past, be prepared |
| As mentioned, the first thing that a lender will do to | | | | to offer explanation of these problems to the lender |
| determine if an individual, couple, or business can qualify | | | | when finding out if you qualify for a loan. Seek out a |
| for a loan is to pull their credit report, usually from | | | | lender specializing in poor credit loans if your credit |
| Experian, Equifax, Transunion, or another smaller credit | | | | scores are too low for a conventional loan. You may |
| bureau. Therefore, before you approach a lender, or | | | | find that by seeking these lenders, you'll easily qualify |
| even start preparing to request a loan and see if you | | | | for a loan. |
| qualify for a loan, make sure your credit scores are as | | | | Regardless of your credit scores, always make sure |
| high as possible. Get a copy of your credit report from | | | | that the loan payments fit into your current personal or |
| each of these three credit bureaus. Review each item | | | | business budget easily, and do this before determining |
| on the report carefully, and report any errors that you | | | | if you qualify for a loan. Not making payments on time |
| find. For example, if you've gone through a divorce and | | | | can result in adverse marks on your credit reports, |
| a loan was placed in your spouse's name, request that | | | | reducing your credit scores and making it difficult to |
| that item be removed from your report to not reflect | | | | obtain future loans. |