Although you can get an investment loan with a poor credit score, you stand better chances to get the loan with less hassle if your rating is impressive. The approval of your loan will be faster. What's more is that having good credit compared to fair credit could help you save interest that runs into thousands of dollars over the term of the loan.
It is, therefore, prudent to improve your rating as much as you can before applying for an investment loan. The good news is that you can use several techniques to enhance your score in a matter of several weeks. Ideally, building good credit is a process that involves responsible financial management and takes time.
Here are some methods you can employ to raise your rating quickly before requesting for an investment loan:
Scrutinize your credit report and dispute any issues
According to some studies, one in every five borrowers has some mistakes in at least one of their credit reports. This shows that reports could have errors or wrong information that can mess up your score. First thing's first, you have to obtain a copy of your credit report from each of the main credit bureaus. Then examine them keenly to pick out errors such as wrong names or contact information, entries entered more than once, other people's credit lines entered into your report by mistake, wrong account status, and other errors. After having spotted some issues, you then need to dispute the errors in each report with the concerned credit bureau. The correction of such errors could cause your score to rise.
Request to be included as an authorized user
While you may approach a relative or friend with good credit to piggyback on their credit, it may be hard since you could lack someone to assist you. Other people may not be will willing to add you as an authorized user on their accounts. This is where credit boosting experts steps in. These experts help borrowers who want to boost their credit to get tradelines with many years of impressive repayment history. You are added to the accounts as an authorized user for a fee, thus boosting your score. The beauty of this arrangement is that you don't have to know the details of the card account or use the card. The primary card holder's activity reflects on your credit report, thus improving your score.
Seek a raise in credit limit
Requesting your card issuer for a credit limit increase is another technique that you can use to improve your credit rating within a short period. The effect of getting an increase in credit limit is that it lowers your credit utilization ratio. The lower the ratio, the better the credit score becomes.
Raising your credit limit may only require a request through your card issuer's website. However, you may need to call your card company to request an increase in the limit. It is not always guaranteed that the limit will be increased because if your account has experienced some issue since you opened it, the limit may even be reduced.
There you have some techniques you can utilize to improve your credit before applying for an investment loan. Besides these, you can also settle some of your outstanding amounts to improve your debt-income ratio, which increases your chances of getting the investment loan approved. You also need to avoid applying for other new credit products before applying for the investment loan. New applications will result in hard inquiries, giving an impression of over-reliance on debt and lowering your score.