If you are planning to apply for a personal loan, you will want to make sure that you have maximized your chances of being approved before you submit your application. This is very important because each time you apply for a loan, an inquiry will be made on your credit report. These inquiries can temporarily reduce your credit score and make it more difficult for you to get approved if you need to submit subsequent applications to a different lender. That is why you should always complete the following three steps before applying for a personal loan to improve your chances of being approved. 

Step #1: Deposit Any Cash Savings You May Have

When you apply for a personal loan, you can expect lenders to check your account balances to determine how financially stable you are. If you have been saving money in the form of cash, now is a great time to deposit those savings into your account. This can make a big difference in your ability to get approved for a personal loan. 

Step #2: Check Your Credit Report For Inaccuracies

The last thing you want is to have your loan application denied because of inaccurate information contained in your credit report. That is why you should always request a copy of your credit report from each of the three major credit bureaus and carefully review each report for inaccuracies. These inaccuracies can include things such as inaccurate balance information, outdated debts that should have been removed, and accounts that were opened fraudulently by someone else. If you find any inaccuracies in your report, you will want to dispute this information with the credit bureau and request that the information is removed from your report. This process can take as long as several months, so you will want to make sure you complete this step well in advance of when you plan on applying for a personal loan. 

Step #3: Boost Your Credit Score By Adding Rent And Utility Payments

While many everyday expenses such as rent and utility payments are not automatically reported to the credit bureaus, you now have the option of voluntarily including this information. This can be quite beneficial for you if you have kept these accounts current and made your payments on time. If you have not already added these payments to your credit report, you will want to complete this step before applying for a personal loan. This can be a great way to see an instant boost in your credit score, which can certainly help to improve your chances of being approved for a loan. 

For more information, contact a local lender, like LincOne Federal Credit Union.