Unsecured loans are also called tenant loans because these are especially offered to non-homeowners. If you are renting a home, then obviously you cannot qualify for a secured loan. However, because of the risk unsecured loan lenders may be more rigorous in approving applications.
Below are tips on how you can increase your chances of getting approved for an unsecured or tenant loan:
Build up your credit rating. Have you checked your credit report? If not, order a copy of your report from the three credit bureaus (Equifax, Experian, TransUnion) to see if you can qualify for a tenant loan.
See to it that there are no false charges or incorrect details in your report which could pull down your score. If you discover any error, send a dispute letter immediately to the bureau that issued your report. Once the corrections have been made in your credit report, that’s the time you can submit your loan application.
If you have a low score, consider working on improving your score before applying for a tenant loan. Having good credit not only ensures the approval of your loan, it also gives you a stronger negotiating power when asking for a lower rate or a better deal.
Close out obsolete accounts. Do you have credit cards that you do not use anymore? If yes, consider closing out your idle accounts. Having too many credit card accounts in your name makes you a “risky borrower” in the eyes of lenders. Nevertheless, when closing an account, see to it that it’s not the one that makes up the oldest part of your credit history.
Do not submit many applications at once. Some people try their luck of getting approved for a loan by submitting applications to different lenders. However, each lender you submitted an application to will be inquiring on your report and they will also see inquiries from other lenders. Too many inquiries in your report sends out a negative impression as to why you need multiple loans or why you need to apply to different lenders.
Secure a stable employment. Do you have a stable job? Of course, lenders want to make sure that you will be able to keep up with your repayment not just for the first year but for throughout your loan’s term. If you’ve just got hired, you may want to wait until you get past the “probationary period” before applying for a loan.
Do not apply if your credit rating does not qualify. Getting your application declined will only hurt your credit score. Thus, before submitting application, check the credit qualification of the lender and see to it that you are eligible to apply.
About the Author
Sandra Thompson is a loan consultant with Unsecured Loans Now and has been providing consumers and business owners with Unsecured Loans since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Business Loans and Unsecured Credit Cards. Copyright 2008.
