Can I get a personal loan for $500,000?

You may be ready to consolidate all your debt into more affordable payments, or maybe you have a large project coming up that you need financing for. Whatever your need is, deciding to take out a $50,000 loan is a big decision.

Your credit score is one of the most important factors in qualifying for a loan. Here are three tips to get the most competitive offer.

  • Check your credit report. Sometimes creditors make mistakes. Sometimes credit bureaus make mistakes. Checking your credit report can help you catch any mistakes that could hurt your score before you apply for a loan. Reach out to both your creditors and the credit bureaus if you find anything that doesn’t look right.
  • Pay off small debts. Doing anything you can to pay off your debts quickly can not only lower your credit score. It can also lower your DTI, making you an even more attractive candidate in more than one way.
  • Do not cancel credit cards. You might think that canceling a credit card you don’t use can help, but it’s actually the opposite. Basically, your credit score will be higher if you have access to a lot more credit than you’re using. Getting rid of a credit card lowers the amount of credit you have access to, so hold off until after you’re approved.

If you don’t need that loan right away, here are two ways to make your credit even stronger in the long run, and help you qualify for even lower rates.

  • Diversify your debts. In the short-term, taking on more debt hurts your credit because it involves a hard credit inquiry. But taking on a credit card if you only have student loans or a small personal loan if you only have credit cards increases your diversity, which accounts for 10% of your FICO score.
  • Keep your credit card bill low. Remember that credit utilization score we mentioned early? A great way to lower it is by simply not using your credit card any more than you have to. This accounts for 30% of your credit score.

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Robin Bell

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