Have you ever been denied a loan? Here’s how to go from no to yes!
When you go into a financial institution to get a loan, they may or may not say yes. You have to prove that you can pay back the money. So they will look at your credit score and credit report. And yes, this applies to Jamaica too!
Your credit score basically tells your lender how risky it is to lend you money, and how likely they are to get their money back.
Your credit report is basically a snapshot of your borrowing habits. Now, with AI being used in a lot of loan applications, your report is very important! Several companies are now allowing you to apply and get approved for a loan without ever talking to an actual person. They’ll even disburse the loan within minutes! How can they do that? By drawing on the info from your credit report, so it’s really important that you have a good report and good credit score.
A low credit score tells lenders that you are high risk, so they’re going to give you a higher interest rate to make up for the risk of you defaulting on your loan. They will probably also give you a lower credit limit, or deny the loan completely.
So what impacts your credit score? Missing payments or consistently late payments is a big one. That can hurt your score because lenders can see you’re not reliable and they can’t count on the fact that you’ll pay the money back.
Another factor is how much debt you have relative to your income. If you’re completely reliant on credit cards and have high balances, your lender might feel that you could struggle to pay back future loans.
On the other hand, a high credit score tells lenders that you’re a great customer who’s likely to pay on time every month. So they’re gonna do everything in their power to attract you as a customer. They’ll offer you their lowest interest rates and best terms. You may even get them to waive some of their fees, because like I said, they really want you as a customer.
Learn more about loans, debt and your credit score here!