If you are unaware of your credit score or credit health problems and apply for a loan, you could perform badly during the approval process.
Sourav and Ankit are watching the New York Marathon on TV and decide that they want to run a marathon. Sourav immediately goes online and signs up for the Mumbai marathon taking place in two months time. While running the race, his initial excitement gives way to exhaustion, and he realizes he is physically unfit for such a demanding race. He drops out before reaching the halfway point.
Ankit approaches the race decision differently. He visits the doctor for a complete check-up where he finds out, to his surprise, that he has low iron levels. Newly aware of this fitness issue, he decides against signing up for this year’s race. He takes medication, trains regularly and registers for next year’s marathon. Who do you think maximized his chance of success?
Clearly, Ankit! It is the same logic that applies to your credit health and loan applications. If you are unaware of your credit score or credit health problems and apply for a loan, you could perform badly during the approval process. The problem areas mentioned in your report could cause lenders to reject your application.
The good news is that, like Ankit, you can make sure that you perform well during the loan approval ‘race’ by checking your credit report periodically. If you know what is in your credit report, it is like going for an interview and knowing what questions will be asked. You can prepare beforehand to ace the loan ‘interview’! To increase your chances of being approved for a loan, you should
• Check your report annually so that you remain updated on your score
• Identify issues in your credit health (insufficient credit history, missed payments, reporting errors etc.)
• Focus on these areas to improve your score
Creditmantri.com helps you obtain your Credit Report for free, guides you on improving your score (if required), and puts you in touch with lenders that suit your profile.