Sometimes making a few simple lifestyle adjustments can have a real impact on your finances, but if you’re at a point in your life when you need to borrow money, you want to be seen as someone who lenders can trust.
Whether you’ve recently been rejected for a loan or you’ve obtained your credit report from one of the three credit reference agencies and discovered a far from ideal picture, there are still some steps you can take to help demonstrate you’re a dependable borrower.
Why do you need to demonstrate stability?
While some lenders only look at your credit profile, here at 118 118 Money we look beyond the ratings and view your application on a case-by-case basis. That said, we operate responsibly and only offer loans to those who can comfortably afford the fixed monthly repayments. So, even though we will always try to find a solution to help you get a loan, you need to be able to show that you are in a position to afford these payments and this should be a priority before applying for a loan.
We try to help where we can and have certain criteria you need to meet before we can even consider offering you a loan. You must be:
- aged over 18 years
- a UK resident
- hold a current UK bank account and debit card
- employed or self-employed and earning a monthly net income of more than £700
Borrowers who are unable to prove stability are considered to be a risk by lenders and are more likely to receive a higher rate of interest or face rejection, which can come as a huge setback in times when financial help is needed.
Proving your financial stability
There are a number of factors lenders will take into account to decide whether or not you are creditworthy and should be considered for a loan. If you are borrowing money you need to prove you have a steady source of income and you are able to make the repayments in full and on time. An erratic work history can leave a poor impression. Not only can it reflect badly on you but it might also suggest that you are working in a volatile industry and your income may not be viewed as secure.
Those who are in full or part-time employment are generally considered more secure than those who are self-employed since they have a guaranteed regular income. However, if you are self-employed there is no need to panic. Here at 118 118 Money we review every application individually and there are still steps you can take to prove you are financially reliable, even if you work for yourself.
Other things to consider, which can make a difference to the way you are perceived by lenders, is to be consistent throughout your application, and if you’re a homeowner, rather than a renter, you will usually be seen in a more favourable light, depending on your other circumstances. If you’ve been with the same bank or building society for a number of years, are married, or have been with the same employer and lived at the same address for years then these are also other factors which will help to show you have the ability to become a dependable borrower.
A landline can help prove your stability
Adding a landline as the main contact number in your loan application tends to be more preferable since you are rooted to one address and it can also help with security checks. While mobile phone usage has increased over the years, it can still be worthwhile getting a landline as it will help towards demonstrating a degree of stability.
Get on the electoral roll
Sounds simple? Well that’s because this is one of those things that can easily be overlooked but if you don’t have a permanent record of address, then it can quickly ring alarm bells as it gives your proof of address. Remember: changing address several times in a short space of time might not show you in the most positive light when applying for a loan. To combat this, make sure you have registered your bank accounts, phone contracts, credit cards and any bills you need to pay at each address, so there are no gaps in your records and always make sure this matches up with the details in your credit report.
Paying bills on time
The last thing a lender wants to see is that you find it difficult to make the repayments. If you have forgotten to pay the occasional bill, the lender will see is that you are unreliable when it comes to paying back the money you owe.
Finally, another way to demonstrate stability is to show you have a savings account, as this shows your ability to budget and plan for the future.
Always here when you need us
Our dedicated team is on hand 24/7 to discuss any queries about your loan and finances. We want to help where we can. Why not find out which loan is right for you and your circumstances by using our personal loans calculator?