This article was written by Elisabeth S., a client happiness specialist at Earnest.
There are no essays or letters of recommendation required. You don’t have to complete a case study or test assignment. While applying to refinance your student loans or get a personal loan is less rigorous than applying for school or even for a job, it’s still an application to take seriously and set aside the time to do it right.
We’ve pulled together a few pointers to help you have the best possible loan application. We’re excited to welcome you into the Earnest community.
Check Your Credit Report
You may know your credit score, but a credit report is a lot more than a single number. Your credit report has information about every loan, credit card, or line of credit in your name, including balances and repayment history. When we pull your credit report, we have to consider everything on it — so you want to make sure it’s accurate before applying for a loan.
You can get free access to your report through AnnualCreditReport.com, where you can view versions of your report from each of the three biggest credit reporting agencies. If you see a discrepancy, you can correct or dispute any inaccurate information with that specific agency.
Earnest pulls credit reports from Experian, so if you’re applying for an Earnest loan, that’s the one you’ll want to double check.
Link as Much Financial Information as Possible
At Earnest, we consider as much of your financial life as we can in order to give you the lowest rates possible. We are less focused on things like a credit score, and more focused on the things that show us you’ll do great with your new loan.
The more information we have, the better. Things that can count in your favor include linking savings accounts, retirement accounts, investments, and credit cards along with any proof of additional income. All these pieces help us get the best picture possible of you and help us understand and reward you for your financial responsibility.
Remember, linking your accounts to Earnest is secure and private. Under no circumstances do we ever sell your information (and that includes your email address) to third parties.
Have a Safety Net in Place
Aggressively paying down debt is a great habit to cultivate — but one of the best ways to indicate to your lender that you can handle another loan is to also have a cash safety net in place.
Having three months or more of your normal expenses — including living expenses, like rent and food, and all your regular bills and debt payments — ensures that, even if something unexpected happens, you won’t be in danger of falling behind on payments or struggle to make ends meet.
Have Documentation Handy
In order to reward you for all your financial responsibility, we have to be able to verify the information on your application. Often this can be done through electronic account connections, but sometimes we will ask for records like pay stubs or other loan statements. To ensure that we can zip through this step quickly, make sure you have your recent records in an accessible place, whether those are online statements or paper records.
Apply After Your Next Raise
Think you’ll get a raise soon, or expecting a bonus? If you anticipate increasing your cash flow in the coming months, you might want to wait to apply for a loan until after it comes your way. That way you can include your higher income on your application.
If you don’t want to wait until you have that raise but you have confirmation in writing (a letter from your company, for example), you’ll want to have that ready to show. It’s just one more piece of information that helps us understand more about you.
Self-Employed? Apply After You’ve Done Taxes
Most lenders need to verify your financial information before extending an offer, including your income. Most income can often be verified using a pay stub. However, if you don’t receive pay stubs as you work for yourself, you may want to wait to apply for a loan until after you’ve done your yearly taxes. Your IRS tax return can be used as a record of your earnings.