May 15th, 2020 | Updated on June 3rd, 2021
Online Loan Basic Requirements
Online loans today provided by numerous financial companies are among the most popular ways to get quick money in case of emergency, for business needs, traveling, etc.
Nearly every platform offers high-speed service with a limited amount of requirements. Normally, companies in Sri Lanka ask for the following requisites:
- Bank account;
- Steady income;
- NIC card (National Identity Card);
- Mobile number.
These requirements allow loaners to have a clear idea about their client. However, there are cases when people who need credits couldn’t present information about their steady income.
Freelancers, people with unemployed status, and owners of real estate will be evaluated as potential lendees through their credit score.
Although, no one is ideal, so some debts or skipped payments could impinge on your credit history a lot. Personal loan rates in Sri Lanka vary from company to company.
That’s why if you don’t want to repay in three times more than you lent, it is essential to prepare beforehand.
As a result, you’ll get a loan in the company with the conditions you like. Check up the main steps of your credit score improvement below!
Steps Of Credit Score Improvement
1. Repay All Bills
The first and the most significant component of your credit history is your previous lends. If there are any you need to repay them before you’ll get a new one.
Especially if there are any behind schedule payments or those that weren’t paid at all will influence your credit score badly.
However, the stereotype that nonexistent credit score (no credits were taken) will better your rating to get a loan is just a stereotype.
On the contrary, the more credits you’ve got and the more of them you’ve repaid successfully – the better credit score you possess. Moreover, this is the most evident factor in your successful financial management.
2. Plan Your Finances
As was said earlier successful credit depends on the previous loans. But you couldn’t count on big loan amount if you haven’t loaned at all before.
You’re a stranger for an online loan company. So, if you need a big amount of money in the financial company you’d better start from little credits that would be repaid in time.
Sometimes early repaid loans also affect your credit score. According to Washington Post planning a long credit history makes about 15% of your total credit score. Read the article here.
3. Check Up Your Personal Information And Credit Score
One of the essential factors that could make your rating worse is mistakes in your personal information.
Such things as wrong name spell or incorrect telephone number make your chances low. As, according to the loan companies, this hint on your credit card fraud.
4. Don’t Open A New Credit Card If You Don’t Need It
More doesn’t mean better in this case. There is no need to open new credit cards without necessity.
It’s better to keep one or two for your essentials, though repay for them in time. If you’ll have more than four, the company may also suspect a credit card fraud.
5. Choose Reliable Co-Signer
If you split your account with someone, this will raise your chances to get a loan. In other words, your spouse, one of the parents or your boss will be a guarantor or a co-signer.
Well, it can work vice versa, when the weak credit history of your spouse will low your score.
6. Keep Credit Utilization At A Low Level
Credit utilization is the spent amount of credit. Financial organizations suggest using not more than 30% of your credit.
Let’s say, if you have Rs. 5 000 credit limit per month and use Rs. 2 500 your credit utilization is 50% which is too much for the majority of companies.
Generally, the less you use the better score you have. Keep it in the limits of 20% to be an ideal candidate.
7. Remember About Your Debts
The one who gave you money will be following you everywhere. That’s why don’t forget about your credits while traveling abroad.
It couldn’t be denied that some people take fast online loans for such occasions on purpose. Nevertheless, big unpaid credits will make your credit score lower if you’ll move to another country.
8. Сredit Score Is Quite Subjective
This statement should make you believe that you can do whatever you want and finally, you’ll find the company that will confirm your loan even if your history is awful. But, it still may vary company to company.
If you believe that you have a chance, try in a different company, though choose the smaller loan amount.
The loan is an extremely important step not depending on its amount. So, know exactly how you would pay it back because every time your repayment shapes your credit score.
However, as you can see there’re some ways to improve your weak credit score.