One of the things you have to know when you are planning to get any type of loan, even a bridging loan, is what your exact spending limits are going to be. It is not a smart move for you to spend up to your maximum limit on a personal loan, even though the spending limits can vary according to several contributing factors. By doing this, you put yourself in jeopardy for being granted more personal loans when you need them.
One of the main things that loan advisers and Lenders look at, is an applicant’s spending habits, because they want to know if you spend the loan’s funds up to the entire limit, or do you save some for a rainy day. They also check to see if you make substantial payments, while you’re spending, or do you just do the minimum payments.
Some people don’t realise that how you conduct yourself when handling personal loans can play a rather large role in the compiling of your credit score. A good way to keep your score high, is to be careful to not go overboard with your spending limits, or you may have a hard time getting additional loans from the lender.
One of the most important key factors, when it comes to getting additional loans, is making timely payments. We dealt with a new candy cart company based in Wirral who were looking to borrow more money so they could buy new candy carts, photobooths and more disco equipment. Not only did they borrow the maximum allowed, they did so and paid back the full amount within 18 months and this positive loan behaviour allowed them to borrow more money when they wanted to buy a few more vintage candy carts.
After one has gained some experience with borrowing, they know how to leverage their debts and income. In a matter of just a few months it may be possible for them to get another loan, because they will have done the hard work to pay the debt off more quickly.
Making payments every month is good, but if they are not made on time, it may not be enough to keep you from having a problem. You are showing that you are a responsible consumer when you make your payments on time. The trait of making timely payments will likely be rewarded by some lenders who make money available for additional personal loans.
Additional personal loans are easier to aquire if someone has been borrowing for several years and making timely payments, than for someone who does not have this type of credit history to offer.
A person like this knows how to stop before reaching their established limits, but the second person must try harder, because they have no established pattern of timely payments.
The latter could have the advantage over the former, however, if the more experienced borrower is deeply in debt and the less experienced borrower is a more prudent spender.
The most helpful professional person to talk to, when you want to find out what your spending limits are on personal loans, is a loan consultant. If you want to be able to get additional financing, a loan consultant would be the best person to tell you what to do. They will be able to tell you all about your credit and payment history and exactly how much you can afford to borrow.
A good credit score will entitle you to financial freedom. It will allow you to get loans and get better interest rates. It is very important to monitor your credit score and avoid things that can hurt your credit rating. In order for you to enjoy a financially stable life, you credit score should be good. This means that your credit score should be high enough to qualify you for loans and competitive interest rates. There are several things that can hurt your credit score severely.
Here are some of them:
Never use your debit card when renting a car. Car companies have the right to pull down your credit score once you fail to use your credit card to use their service. This may be a little strange because cash is definitely better than having a credit balance. However, for car companies, a credit card serves as insurance in case something happens to the care you rented. If you do not use your credit card, the company may think that you have a low credit score and that you cannot be trusted that much. They may send some inquiries and some points may be subtracted from your credit score.
Never say yes to stores offering credit cards. If you want to keep your credit rating good, you should never be tempted to get a department store credit card. No matter how much discount you can get from your first purchase, it does not delete the fact that the interest rates are much higher than the regular credit cards you get from banks and other financial institutions. In addition, you may get an inquiry as to why you are purchasing a credit card. This inquiry can make you lose some points on your credit score which can range from 5 to 35 points depending on your current credit rating.
Never buy furniture using the store’s own in-house finance arm. Even a second charge loan on your own home will ensure your credit score works out better than a store credit card. However, there are some loans that are even worse than credit cards. An example of this is the finance arm of a local shop or store. This can hurt your credit score a whole lot because such financing methods are seen as the last resort. This means that when you purchase such deal, the credit companies will think that you have no other choice because you have no other means of financing or paying for the furniture you bought.
Never allow your credit company to not report your credit habits. Reporting credit that you have taken out is very important especially if you want to have a better credit rating. It is the duty of every credit card company to send reports to the big credit reporting agencies such as Experian or Equifax. The reports should include the credit limit, credit history and the payment history of the credit card owner.
However, some credit card companies fail to fulfill this responsibility and the backfire is on you. FICO has its way of calculating your credit score. Your credit limit is usually necessary in order to compute the scores. If you do not have a credit limit reported to them, it will be difficult for them to determine your current credit rating. When this happens, your credit rating might suffer a lot.
Although it is the credit card company’s responsibility to send reports, it is also your duty as a consumer to make sure that they are doing their job.