Before applying for any personal loan, the borrower must be aware of the lending company's requirements and must be able to meet them to ensure that the loan application will be approved. And the foremost requirement is a good credit rating.
When a loan application is denied, the borrower may lose all hope or rashly choose the lending company that is not offering the best deal. What this borrower must do is to step back and reconsider the whole situation, before sending another loan application.
The Credit Rating
For unsecured personal loans, the one thing that makes or breaks a loan application is the credit rating of the applicant. The credit rating of the applicant is the one thing that financial institutions and lending companies use to determine if the loan applicant has the ability to pay the loaned amount. A person with good credit rating is assumed to be a person who can pay the loan. While a person with bad or poor credit rating is considered high risk.
This means that a poor credit rating becomes the deal breaker in many applications for unsecured personal loans. That is, a lot of loan applications are denied due to a poor credit rating. This means that a person planning to apply for an unsecured personal loan must first make sure that his credit rating is unblemished.
Keeping the Credit Rating Good
Making sure that the credit rating is in good order is important so that the loan application for a personal loan is approved. But how will a person know that their credit rating will withstand the scrutiny of various lending companies. To have a general idea, here are the things that may adversely affect the credit rating.
• Making late payments can drag down a person's credit rating. These recent late payments for utility bills, credit cards, and other types of loans will negatively reflect on the person's credit record.
• Being denied or turned down by other institutions can adversely affect a person's credit rating. That is, if the person has already applied for another loan and has been denied, and if a person has applied for a credit card and has been turned down, such events will also negatively affect his credit rating.
• Acquiring a CCJ or County Court Judgment is a sure sign that the credit rating is not considered good.
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About The Author
John Mussi is the founder of UK Personal Secured Loans who help homeowners find the best available loans via the http://www.uk-personal-secured-loans.com website.
[tags]loan application, personal loan, personal loans[/tags]
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