Do you have to have a perfect credit score to be considered for a loan?
Any responsible lender will look at your credit score, to assess your eligibility for a loan. Often there are several factors that will help a lender make a final decision, many lenders will take many things into consideration.
An example of this would be, looking at past credit history and to see how you have managed credit in the past. Did you make the payments on time, did you have any defaults or late payments noted on your account?
Even though you do not have to have a perfect credit score, we would always recommend that you try and do things to help improve your credit score you can find lots of credible articles online that will give you some pointers on how to do this.
If you do have a strong credit score, it can certainly help you to be approved easier and quicker, but it is not the overall deciding factor on if you will be approved or not.
This being the case, don’t think that you cannot reach out to a loan company if you would like to apply for a loan or be considered for credit.
If you apply for lots of loans, does this mean you will have a greater chance of being approved?
Many people think that they cannot apply for a loan, if they have already taken out a loan with another company. This is not the case you can still apply for a loan regardless, but it is worth remembering that if you have multiple credit applications at any one time this can sometimes affect your credit rating as a result.
If you apply for credit, a lender will carry out a hard credit search, this will show on your credit report and remain there for some time. A hard credit search will be visible to other lenders and will give them the impression that you are desperate to get a loan.
This can lead to what lenders call ‘Red flags’ and to doubt if you are creditworthy or not. If a lender reviews your application and can see that you have multiple applications within a short period of time this will not help them to give you a positive decision.
We would always advise to avoid unnecessary checks, to only apply for credit when you really need it and to ensure that you can afford to pay that loan back over the agreed period.
If you are looking around for the best loan or rate, we would recommend that you potentially look at lenders who will only carry out a soft search. If you are unsure, if they do or not we would advise you contact them prior to making an application, so you can understand how they may come to a final decision.
Soft searches will check your credit report, but do not leave a visible footprint for other lenders to see. This will give you a stronger chance of being accepted and often those lenders will look at your personal circumstances and what is affordable and realistic in terms of your regular payments.
