When you need more money than you have, getting a loan is a good way to bridge the gap. Credit unions offer loans for a variety of things, such as to purchase cars or homes, or even personal loans. Though the type of loan may vary, the first step is the same for all of these loans. Each one starts with an application.

The loan application can seem daunting, but it can be a lot easier if you have everything in order beforehand. The application requires a lot of personal information so that the credit union can easily decide if giving you the loan is a smart choice. You don’t want to turn in an incomplete application or turn it in before you’ve done everything to present yourself the best way possible. That’s why you should have all of your important documents together beforehand.

At Rivermark Community Credit Union, we’ve given out many loans to our members, and the loans have allowed them to purchase items beyond their current financial reach. If you’re interested in getting a loan, you should know which things are important to have together beforehand. Your chances of being approved will be much higher if you’re as well-prepared as possible. Here are a few items that you should have in order before you start a loan application.

1. Credit History

When you apply for a loan, you’ll want to make sure your credit history is accurate and that you have the highest credit score possible for you. You can start looking into your credit history by checking out your credit score. Once every year, people are allowed to obtain their credit score free of charge from any of the following three credit reporting agencies: Experian, Equifax, or TransUnion. This report will allow you to see your current credit score and any discrepancies, should they exist.

Your credit score will fall in the range of 300 to 850. In general, a credit score of 650 is considered good by credit bureaus, but the higher you can get the score the better your chances of being approved for a loan. Good credit scores are a big aspect of the loan application process, but some financial institutions, like credit unions, are more flexible with your score when you’re a member. If you see there are past-due bills on your credit report or that your credit card statements are negatively affecting your score, now is a good time to try to correct those things. Presenting a good credit score and good credit history will work in your favor.

2. Employment Information

Lenders feel better about lending to people who can readily supply employment information, which is why you’ll have to prove you have a steady flow of income. This helps lenders feel secure about the likelihood of you being able to continue to pay off the loan. That’s why it’s important to have your employment information in order before applying for a loan. To prove that you have stable employment, you should have your employer’s contact information readily available in case the lender asks for it.

3. Proof of Income

Aside from supplying your employment information, you’ll also want to get your proof of income in order. You should have a few copies of your pay stubs available so your salary can be verified. You’ll also want to provide your W2s for the last two years. This should be enough information for your lender to accurately assess your employment experience and help you to get approved for your loan faster, but there are ways to strengthen your case.

If you’re a part of a family, your salary isn’t the only amount that counts toward your monthly income. Your spouse’s income can also be supplied to show that you have more coming into your household than just what you’re making. And if you’re working any side jobs or doing freelance work, try to gather that information as well. If your monthly income is higher, it gives lenders greater trust in your ability to pay off a loan.

4. Proof of Identity

No one is likely to give you a loan if you can’t prove your identity. Credit unions like Rivermark Community Credit Union want to be sure that all of your information is safe and that your identity is protected, which is why having proof of identity is so important. And during the loan process, you should have your personal information together before you start a loan application. There are a few methods you can use to prove your identity for a loan application, but credit unions usually ask for two forms of identification, such as:

  • Driver’s license
  • Social Security number
  • Passport
  • Birth certificate
  • Certificate of citizenship

Look into which two forms of identification your credit union will ask for and have them together before you begin your loan application.

5. Assets and Debt Information

Lenders will want to know how much money you’re required to pay every month outside of your loan. Those debts, which include things like student loans, credit card debt, and existing loans, will play a part in how well you’ll be able to handle another financial obligation. They may want to have documentation that proves how much debt you have accrued and what your monthly payment schedule is like. Providing those types of documents to your lender will help it determine your debt-to-income ratio, which will impact your chances of being approved. If there are any debts that you’re able to pay off easily, doing so before applying for a loan will be in your best interest.

Debt isn’t the only thing your lender will be interested in. Your assets are also an important part of your loan application. They’ll also want to know how much money you currently have, outside of the money that you receive from your employment. Providing this documentation can help your case when it comes to the loan application. Items like bank statements, retirement, and investment account statements, as well as gift letters, will all be taken into consideration.