本文发表在 rolia.net 枫下论坛The Basics of Borrowing - Part 2
Last month, we talked about how to choose a type of credit. Now that you know what you want, it’s time to get it.
Give me some credit (please)
These days, there are several ways to approach a lender for a loan. You can apply online, over the phone or at the branch.
In any case, the lender will need certain facts to make a credit assessment. This information comes from the information you provide and the credit bureau report that the lender will obtain about your credit history.
If you’ve never applied for a loan before, you may be nervous. That’s natural. After all, you’re going to be telling the lender a lot of personal information about yourself. And you may feel embarrassed if you're in a tight spot financially.
But whether you are building your assets or rectifying your financial situation, you should approach the credit application with confidence and a plan.
Part of this plan might be to enlist a family member or someone else to co-sign the loan with you. If you’ve never had a loan before, take heart - this is often a requirement for first-time borrowers.
A little planning goes a long way
Some basic information is required for the loan application. Having answers handy for the following questions will speed up the process and cut down on your need to make follow-up visits and calls.
Why do you need the money?
What’s your current address and telephone number (and, if you rent, your landlord’s name, address and telephone number)? If you have lived at your current address for less than two years, what was your previous address?
What’s your employer’s name, address and phone number, and your current gross pay? (Take a pay slip. You may be asked to provide a letter from your employer confirming your income.)
What other income – such as rental income, or dividends – do you have? (Take proof of that income with you.)
Show and tell
You may be asked to provide a complete list of all your assets and liabilities. For assets, include locations, account numbers and balances for your deposit and chequing accounts, and details of your investments (GICs, mutual funds, RRSPs, stocks and real estate).
While it’s OK to estimate an amount for personal assets such as jewelry or furniture, don’t overestimate since financial institutions know they have little resale value. Include the make, model and year of your car and its worth on your list.
On your liabilities list, include locations, account numbers and balances for outstanding loans/debts — including previous loans, credit card balances and other forms of financing — as well as a mortgage statement.
Take a hard look at the information you’ve put together and identify any areas of weakness (e.g. recent changes in payment patterns). Be prepared to explain them.
By the same token, analyse your areas of strength (e.g. good cash-flow management) and figure out how to emphasize them.
Understanding your credit history
You know that old saying "history has a way of repeating itself"? Lenders live by that motto. That’s why your credit history plays such a big part in the decision. It’s a snapshot of how you have handled debt in the past and, by extension, how you may handle debt in the future.
For an existing customer, the lender will check out the activity on your accounts, look at how you managed overdrafts and whether you wrote any NSF cheques, and review your previous loan repayment history. Lenders may also check your borrowing history by using information provided by a credit bureau.
Your credit history typically includes, along with other information:
your full name, address, birth date, and Social Insurance Number (optional)
your current employer, so your income and work history can be verified
your personal history (including former addresses and employment)
your marital status, spouse's name and employment, and number of dependants
matters of public record, such as judgments, foreclosures and seizures
Suppose they turn me down...
If your request for financing is declined, remember that it is the request being denied, not you. Don’t take it personally. You may be frustrated, but losing your temper won’t motivate the lender to do any more work on your behalf.
Instead, be professional. Stay cool and consider doing the following:
Politely ask the lender why your request was turned down.
Try asking for a lesser amount. The size of your request might be the sticking point.
Also, suggest some kind of security, or enlist someone to co-sign the loan with you.
Check your credit bureau report (by contacting the credit bureau) and clarify any mistakes.
If you have a poor credit history, ask the lender for advice on how to paint a better financial picture for yourself.
Knowledge is power
As you can see, borrowing can help you find ways to make your dreams a reality. But smart borrowing goes beyond just laying your hands on a loan.
It involves knowing when to borrow, how to comparison shop for the best deal and how to approach a lender for the money.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Last month, we talked about how to choose a type of credit. Now that you know what you want, it’s time to get it.
Give me some credit (please)
These days, there are several ways to approach a lender for a loan. You can apply online, over the phone or at the branch.
In any case, the lender will need certain facts to make a credit assessment. This information comes from the information you provide and the credit bureau report that the lender will obtain about your credit history.
If you’ve never applied for a loan before, you may be nervous. That’s natural. After all, you’re going to be telling the lender a lot of personal information about yourself. And you may feel embarrassed if you're in a tight spot financially.
But whether you are building your assets or rectifying your financial situation, you should approach the credit application with confidence and a plan.
Part of this plan might be to enlist a family member or someone else to co-sign the loan with you. If you’ve never had a loan before, take heart - this is often a requirement for first-time borrowers.
A little planning goes a long way
Some basic information is required for the loan application. Having answers handy for the following questions will speed up the process and cut down on your need to make follow-up visits and calls.
Why do you need the money?
What’s your current address and telephone number (and, if you rent, your landlord’s name, address and telephone number)? If you have lived at your current address for less than two years, what was your previous address?
What’s your employer’s name, address and phone number, and your current gross pay? (Take a pay slip. You may be asked to provide a letter from your employer confirming your income.)
What other income – such as rental income, or dividends – do you have? (Take proof of that income with you.)
Show and tell
You may be asked to provide a complete list of all your assets and liabilities. For assets, include locations, account numbers and balances for your deposit and chequing accounts, and details of your investments (GICs, mutual funds, RRSPs, stocks and real estate).
While it’s OK to estimate an amount for personal assets such as jewelry or furniture, don’t overestimate since financial institutions know they have little resale value. Include the make, model and year of your car and its worth on your list.
On your liabilities list, include locations, account numbers and balances for outstanding loans/debts — including previous loans, credit card balances and other forms of financing — as well as a mortgage statement.
Take a hard look at the information you’ve put together and identify any areas of weakness (e.g. recent changes in payment patterns). Be prepared to explain them.
By the same token, analyse your areas of strength (e.g. good cash-flow management) and figure out how to emphasize them.
Understanding your credit history
You know that old saying "history has a way of repeating itself"? Lenders live by that motto. That’s why your credit history plays such a big part in the decision. It’s a snapshot of how you have handled debt in the past and, by extension, how you may handle debt in the future.
For an existing customer, the lender will check out the activity on your accounts, look at how you managed overdrafts and whether you wrote any NSF cheques, and review your previous loan repayment history. Lenders may also check your borrowing history by using information provided by a credit bureau.
Your credit history typically includes, along with other information:
your full name, address, birth date, and Social Insurance Number (optional)
your current employer, so your income and work history can be verified
your personal history (including former addresses and employment)
your marital status, spouse's name and employment, and number of dependants
matters of public record, such as judgments, foreclosures and seizures
Suppose they turn me down...
If your request for financing is declined, remember that it is the request being denied, not you. Don’t take it personally. You may be frustrated, but losing your temper won’t motivate the lender to do any more work on your behalf.
Instead, be professional. Stay cool and consider doing the following:
Politely ask the lender why your request was turned down.
Try asking for a lesser amount. The size of your request might be the sticking point.
Also, suggest some kind of security, or enlist someone to co-sign the loan with you.
Check your credit bureau report (by contacting the credit bureau) and clarify any mistakes.
If you have a poor credit history, ask the lender for advice on how to paint a better financial picture for yourself.
Knowledge is power
As you can see, borrowing can help you find ways to make your dreams a reality. But smart borrowing goes beyond just laying your hands on a loan.
It involves knowing when to borrow, how to comparison shop for the best deal and how to approach a lender for the money.更多精彩文章及讨论，请光临枫下论坛 rolia.net