Getting a loan is fine, as long as you are a good borrower. As someone who is frequently applying for a loan for different purposes like expanding your business or paying off your existing loans, you need to make sure that you are paying the right amount at the right time. That’s because it will affect your borrower image. The more you disregard your responsibilities as a borrower, the fewer the banks and financial institutions that will lend you next time. Everything you do that’s related to your loans can make a great impact on your credit history. So, if you want lenders to compete for your mortgage, here’s what you can do.
1) Develop a good payment habit.
The first step you need to do to attract more lenders to lend you is to develop a good payment habit. There are many ways to do this but you have to stick to the basic approaches. Initially, you will have to pay your first monthly payment when you have a loan. To start developing a habit, you need to commit to paying your monthly amortization every due date. Doing it more than 20 times will help you get used to doing it. Consider paying the right amount as well. After paying off your first loan, you will surely bring this habit to your next journey as a borrower.
2) Pay the exact amount of your principal and interest.
When you got your first loan, your lending company usually gives you a document where you can see the amount of the principal and interest you have to pay for the month. Keep this record so you have a reference when you are paying. To get a good credit record, aim to pay the exact amount of your monthly amortization, including the interest. This will be recorded in your credit record and once lenders see your history, they will surely approve your loan fast because you are always paying the exact amount.
3) Increase your credit scores.
Did you know that having a good credit score will help you entice more lenders to approve your mortgages? Credit scores reflect your borrower’s habits. The higher your score is, the more positive your credit record is. If you have lower credit scores, it’s a bad way to start your journey as a borrower. Banks and financial institutions use your credit scores, records, and history to assess whether you deserve to be approved or not. If you have a good score, there is a higher possibility for you to get your applications granted.
To increase your credit scores, a good payment habit is a pre-requisite. You need to avoid skipping a monthly payment even if you have plans to double your payment month. It’s better to advance your payment than to make it late. Additionally, you need to stop getting loans if you haven’t paid your existing one yet. The lesser the number of your outstanding loan is, the better for your record.
4) Pay your loans in full.
If you have the financial capacity to pay your loans in full, you should target paying it in full. There are lenders who prefer borrowers who pay the whole principal and interest after months of getting the loan. As for your benefit as a borrower, you will pay lesser interests if you will pay your debts earlier than its due date.
Keep in mind that there are banks and financial institutions that choose borrowers who want to pay higher interest rates so they can pay their loans gradually for a longer period of time. Whether you want to pay in full or you want to do pay in portions, it’s totally fine. As long as you have a good payment habit, it will be recorded in your history as a borrower.
5) Avoid getting additional mortgages.
Lenders don’t want a borrower who has many outstanding debts. To keep them competing for your mortgage, you need to avoid getting additional mortgages especially if you don’t really need them. One home mortgage is enough if you have a family. Getting another loan for your car is okay too. What’s not recommended is getting an additional loan to buy another car when your previous car mortgage hasn’t been fully paid.