How Loan Applications Affect Your Credit Score

    • Should you be worried if your credit score has been negatively affected? A credit score is an indicator of your “creditworthiness;” in other words, how well you manage your finances.

      It is one of the first things that creditors or lending agencies will look at if you apply for a loan, credit card, and so on. If you have a good credit score, which is 670 and above, you are at an advantage; but a low credit score could hamper your chances of getting a loan or get you a loan at a higher interest rate.

      So yes, you should worry about your credit score being negatively affected, and try to keep it out of the red. One way that your credit score can be brought down is by applying for multiple loans. While applying for a single loan and paying it off without defaulting can help your score, multiple loans tell a different story. Also, if you get rejected for a loan and have to apply again, that also negatively affects your credit score. So, what can you do about it?

      Alternatives to getting a loan

      One of the best alternatives to applying for a loan is applying for a line of credit. If you already have a loan and need some extra funding, a line of credit can not only provide those funds but will also not affect your credit score in the process. With a line of credit, you apply just once, and then have the funds in reserve for whenever you need them.

      Online lending companies like &Solved have made the process of getting a line of credit very easy. Here’s how it works:

      • Visit the &Solved website and create an account with the company.
      • Fill in the line of credit application form and provide proof of identity and the required financial details.
      • As soon as your application is approved, the funds are moved to a revolving account for you to access as and when you need.
      • All costs, interest rates and repayment structure are discussed upfront with no hidden charges that crop up later.
      • You can withdraw any amount as per your requirements within your line of credit limit.
      • You only payback and pay interest on what you withdraw and not the whole amount.

      Why is a line of credit better for your credit score than a loan?

      Every time you apply for a loan, it gets registered on your credit report. Once on your credit history, this could give lenders reason to reject you for a loan or increase their interest rates. If you have already taken out several loans, like a home loan, car loan, personal loan, business loan, and so on, making payments on time can be tricky. If you miss a payment or make a payment after the due date, that too will reflect on your credit report and lower your credit score.

      With a line of credit, you can actually go in for debt consolidation and pay off all or part of your existing loans and then just have the line of credit to pay back. Some line of credit companies like &Solved customises your repayment method to best suit your financial needs. When you have paid back your loans using your line of credit, you can help your credit ratings to go up.

      Alternatively, you can simply have your line of credit as a source of extra funds to take care of other needs while most of your income is tied up in repaying a loan. With a line of credit, you don’t need to apply for a second or third loan because you can do whatever you want with the funds that are allocated to you.

      Working with &Solved

      &Solved is a boutique financial lending company that you can access online. With one of the fastest response times and highest approval rates, &Solved could be the answer you need when you need some extra cash. More convenient and quicker than getting a loan, &Solved can help keep your credit ratings up by saving you from having to apply for multiple loans.

      To find out more about our services and how you can apply for a line of credit, please visit our website or call us on the number listed on our Contact Us page.

       

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