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How to Give Yourself the Upper Hand Before Applying for Loans


How to Give Yourself the Upper Hand Before Applying for Loans

While most people know that having a good credit score is crucial to securing a loan, many don’t know what it takes (or how long it takes) to establish good credit. Many Americans are misinformed about the costs of bad credit, with about 10 percent of people falsely believing that everyone starts out with a perfect credit score. Fortunately, there are actions that consumers can take when looking to borrow that won’t just help them achieve their best credit score, but also secure a better monthly installment and a lower interest rate. From making micropayments throughout the month to using a tool like ScoreMaster, here’s how to get approved for a loan and have the upper hand before applying for a loan.

Make Micropayments

It’s always a good idea to pay bills on time, but making small payments — or micropayments — on credit cards throughout the month is even better. Micropayments keep credit card balances down and boost credit scores, making potential borrowers more attractive to lenders. Keeping an organized and scheduled payment plan throughout the month helps consumers avoid late payments and pay more than the minimum. And while it’s great to keep balances low, potential borrowers shouldn’t avoid using their cards altogether. According to Greg McBride, chief financial analyst at Bankrate.com, it’s best to focus on not letting an account balance exceed more than 10 percent of the credit limit at any given time.

Become an Authorized User

What about those who cannot get approved for credit cards and thus have trouble building credit and becoming an attractive borrower? A younger or inexperienced consumer can become an authorized user on somebody else’s card to build a credit score without being legally responsible for the account. The account holder — who should have a long and positive credit history — doesn’t even have to grant access to the card or share the account number for this credit boost to work.

Check Credit Report for Mistakes and Dispute Errors

As many as one in five credit reports contains an error, which could lead to a loan denial based on inaccurate information. At least 30 days before applying for a loan, prospective borrowers should check their credit and for red flags. If anything looks suspicious, contact both the credit bureau and the source of the inaccurate information, as both are responsible for ensuring that information in the report is correct.

Don’t Quit Your Job

Applying for a new dream job can be exciting, but borrowers should refrain from doing it in the days leading up to loan approval. Drops in income or a job change may worry a lender who is looking for proof that the borrower makes enough money to pay back the loan. It’s advisable to keep your work situation and your income unchanged in the months leading up to a loan application.

Use ScoreMaster

Designed to help consumers get their best credit score in just 20 calendar days, ScoreMaster uses a gamified dashboard that displays potential score increases or decreases based on spending and paying back revolving debt. In addition to helping the consumer become a better user of income and credit with ongoing education, ScoreMaster binds consumers and mortgage brokers to a devised plan for better-quality loans based on your credit score goal. This goal results in lower interest rates and monthly payments as ScoreMaster protects against credit score drops during the loan application process. With ScoreMaster, achieving a credit score isn’t just feasible; it’s fun, and users walk away feeling empowered by their achievement.

Learn more about how ScoreMaster can help prospective borrowers get approved for a loan with their best credit score yet.

*Legal Disclaimer – ScoreMaster is a patent-pending educational feature simulating credit utilization’s effect on credit scores via payments or spending. Your results may vary and are not guaranteed. 


  1. https://www.latimes.com/business/la-fi-bad-credit-20170526-htmlstory.html
  2. https://www.cnbc.com/2018/01/18/how-often-you-should-pay-off-your-credit-card-bill.html
  3. https://www.fool.com/the-ascent/personal-loans/articles/how-can-you-boost-chances-of-getting-approved-for-personal-loan

by Mar 30, 2020, 04:45 PM