Most people, at some point in their lives, will need to take out a loan for a large purchase, be it for a home, a car, or another important expense. Whether you’re in good financial standing or working on credit repair, it’s helpful to have a set of guidelines to look to before submitting a loan application. Keep reading for five tips to improve your chances of loan approval.

The most important thing to do before applying for a loan is to make sure your finances and credit are both in good standing. Even with less-than-stellar credit, there are several things you can do to improve your chances of being approved for a loan, including paying down debt or shopping for a specific type of lender.

Even when not in the market for a loan, it’s always a good idea to keep an eye on your credit score — but it’s downright vital when you’re looking for a line of credit. Making sure the information is correct and accurate — and that your identity hasn’t been compromised — will give you peace of mind about your credit score and general financial standing. It will also help you determine what to look for in a loan offer.

The federal government has mandated that every American adult is entitled to one free credit report per bureau per year, so it’s a good idea to take advantage of this and check your credit once a year at the very least. A variety of free apps and websites will also help you track your credit, or you can use any number of paid services to constantly monitor your credit.

Occasionally, consumers do find errors on their credit reports. If you check your credit and notice an error, this is your chance to contest the item on your credit report and restore accuracy. If you do a lot of online shopping, like many Americans today, it can make you more vulnerable to hackers and scammers. Regularly monitoring your credit report can help ensure your credit information stays out of the wrong hands.

Even if you don’t have the greatest credit score, if you’ve chosen the right lender, you may still be able to qualify for a loan. Some lenders are more likely to loan smaller amounts of money to those who are in the process of rebuilding credit.

Some major banks will automatically turn down loan applicants with a credit score below 700, but many smaller financial institutions may still be willing to work with you, including community banks and local credit unions. You can also use online lending networks, like those below, to shop a wide range of lenders from across the country.

One of the best ways to find a lender with flexible credit requirements is to consult people who have been in a similar situation. Recommendations from friends or coworkers (or online reviews, taken with the proverbial pinch of salt) can help guide you in the right direction.

If you still have questions about whether a certain lender is right for you after doing what research you can online, you can simply call the lender in question and talk through your general financial situation.

Shopping for the right lender can be made a lot easier by pulling your credit reports. For example, if you have poor credit, you can save time (and hard credit inquiries) by skipping lenders that tend to only approve prime applicants. This is important, as hard credit inquiries can have an effect on your credit score.

Your debt-to-income ratio is exactly as it sounds: the ratio of how much debt you have over your total income. A high debt-to-income ratio means you have a large amount of debt relative to the income you have coming in, which can be a strong indicator of financial troubles and an inability to pay your debts.

Thus, if too large a portion of your income is being spent on monthly repayments of debt, such as a mortgage, auto loans, or revolving credit card debt, you may not be eligible for a loan, regardless of your credit score. Essentially, banks want to make sure you can afford to repay the money they loan you, and a high debt-to-income ratio is a red flag.

In general, if you are using more than roughly 40% of your monthly income to repay debt, your chances of being approved for a loan will likely decrease. Keep in mind that this typically only includes actual debts, rather than regular bills like utilities. Make sure you have the income you need to repay your loan to improve your approval chances.

Additionally, if you’re just starting out on your credit journey, you may already know that many lenders can be cautious about granting loans to applicants with little or no credit history. Oftentimes, this can be offset by the addition of a cosigner who has a good deal of credit history, a good credit score, and a low debt-to-income ratio.

However, this person would be responsible for the repayment of the loan should you be unable to pay it back for any reason. Consider this before you ask a coworker, boss, or friend. Ideally, a cosigner should be someone with whom you share a mutually trusting relationship, especially when it comes to money, such as a spouse or family member.

In many cases, one of the fastest ways to improve your credit score (and, thus, improve your approval chances) is to pay down existing debt. This is particularly effective if you have large credit card balances and, thus, high utilization rates, as high credit card utilization can significantly drag down your score.

Though paying down debt can be a large and daunting task for some people, there are many methods to help you effectively and quickly pay down some of your debt without needing to squeeze every penny. However, when paying down debt, expect to have to make some sacrifices, such as giving homemade holiday gifts instead of store-bought ones, cooking at home more often, or finding more inexpensive hobbies.

Don’t be too concerned with paying off every penny, as having some revolving debt can show financial responsibility as long as your utilization remains low and you make at least your minimum payments on time every month. Focus on any delinquent debts first, as these do the most credit damage. Then move on to the highest-interest debts, especially any high-interest credit card debt.

In the modern credit world, loans are a necessity for many people. By following this set of guidelines, you may be able to increase your chances of loan approval by raising your credit score and increasing your overall creditworthiness. This can also help set you up for a lifetime of financial stability.

Indeed, with a little careful planning and budgeting, hard work, and frugality, it’s not too difficult to improve your credit score and put yourself in an excellent position to obtain a variety of future credit products. A credit repair company may also assist with this process by helping to clean up your credit report and remove errors, outdated information, and unsubstantiated accounts. Ultimately, these tips are a good set of guidelines to follow in general, not just when you’re thinking of applying for a loan. Unfortunately, unexpected expenses tend to pop up from time to time and you never know when you may need some extra cash. Maintaining a healthy credit report will help you be prepared when one of those times arise.