How to Obtain a Credit Line From a Bank

Credit lines are available from banks in a variety of forms. People use lines of credit for emergencies, managing small businesses or consolidating other debt. Basic requirements for receiving a line of credit include a good credit score -- preferably a score of 720 or higher. Approval with lower scores is possible, but the bank may charge a higher interest rate. Scores below 620 are considered poor and may disqualify the applicant from most lines of credit. People who intend to carry a balance on a line of credit should spend considerable time shopping for the best available interest rate. A line of credit with a significantly lower interest rate than other lines could result in thousands of dollars of savings over a lifetime.

Instructions

1

Check your credit report and score by ordering a copy of your report from AnnualCreditReport.com. The site offers free reports under the terms of the Fair Credit Reporting Act. Follow instructions on the site for ordering your credit score separately for a fee. Confirm that your score matches accepted standards for good credit. If it does not, spend time improving your credit and then apply. Improve credit by disputing mistakes on credit reports by writing the three credit bureaus, making timely payments on existing accounts and keeping balances on revolving accounts low.

2

Confirm that you meet other standards for approval on a line of credit, including stable income or employment from other sources, such as pension plans, and a stable address. Ideally your credit report should show no missed payments over the past 12 months, and you should have low balances on credit card accounts compared to the credit limits. This shows the bank that you are practicing sound credit fundamentals.

3

Choose a line of credit suitable for your situation. Choose a home equity line of credit if you are a homeowner. These loans typically offer some of the lowest interest rates available on lines of credit because the applicant's house serves as collateral. People without homes can choose from unsecured lines of credit such as credit cards or signature lines of credit.

4

Apply for a small business line of credit if you are a small business owner looking for a line of credit. However, the bank likely will require you to guarantee the loan personally even if you intend to use if exclusively for your business.

5

Review interest rates at local banks by visiting in person, calling or tapping into their websites. Inquire at your current bank and ask about discounts on interest rates for current customers.

6

Apply for the loan by filling out all required paperwork. Submit the information and wait for an answer from the bank.