Whether you’re getting ready to buy a home, start a business, or make a big investment, your borrowing ability can affect how readily you can secure the financing you need. Your borrowing power is how much you could qualify for in loans and how much you can borrow. The way borrowing power is viewed can influence cash flows in residential financing and banking transactions. Here are 10 proven ways you can increase your borrowing power in 2025.

Improve Your Credit Score

One of the most important factors lenders will closely examine when deciding how much you can borrow is your credit score. Here’s what you can do to improve it:

Pay Bills on Time: Late payments can kill your credit score.

Lower Debt: Maximized credit usage will kill your score. Aim to keep your credit usage to less than 30% of what’s available to you.

Inspect Your Credit Report: Proactively review your report for mistakes and challenge inaccuracies.

Limit Credit Applications: Hard inquiries can temporarily dent your score, so apply for credit only when you truly need it.

You can get free credit reports from the Annual Credit Report that tracks performance over time, revealing weaknesses.

Increase Your Income

More income generally means more borrowing power. Here are some approaches to consider:

Get a Side Job: Lots of work side hustles, such as freelancing or ridesharing, to supplement their income.

Get a Raise: If you are happy with your current role, seek a raise.

Seek higher-salaried positions: Utilize expanding sectors, such as healthcare, finance, and technology, to find jobs that pay more.

Spending less than you earn makes you less risky to lenders, which means the more you can borrow.

Pay Down Existing Debt

To borrow more, the (DTI) debt-to-income ratio needs to decrease. Here’s how to get a handle on your debts:

High-Interest Debt: Attack credit cards and personal loans with above-average interest rates first.

Consolidate Debt: A debt consolidation loan can help to bring down your interest rates and put your payments all in one place.

These can even be small amounts but both help a lot in getting rid of your debts quicker.

For example, there are organizations like Stand by Me that offer free financial coaching to help residents manage debt effectively.

Save For A Larger Down Payment

Making a significant down payment means you’ll borrow less and signals to lenders that you’ve been financially responsible. Tips for saving include:

Set Up a Dedicated Savings Account Keep your down payment separate from your other funds.

Stop Spending on Non-Essential: Eating out or subscription services.

Save through automation: Set up direct deposits to go into savings.

First-time home buyer programs such as those offered through the Housing Authority can help with the plan, and also the incentive to save.

Develop a Robust Work History

Lenders prefer borrowers with stable employment. To strengthen your profile:

Stay Put: Avoid changing jobs too often because lenders like stability.

Document Employment History: Have your pay stubs, tax returns and employment verification letters on hand.

Level up: Be promoted or make more money

US Job market is also diversified across industries including education, government and hospitality. Utilize local resources, such Job Link for career exploration.

Limit New Credit Applications

Every time you apply for a new credit line, your credit report gets a hard inquiry — and that can drag your score down. To avoid this:

Apply Only as Needed: Limit applications to only the credit your business requires functionally.

Space Out Applications If you must apply for multiple accounts, do so over several months.

opt for prequalification instead of preapproval: Many Delaware lenders have no-impact prequalification tools.

Get Local Financial Programs

There are several resources Delawareans can tap to help improve their credit to enhance financial stability and increase borrowing power. For example:

Homeownership Programs provide money for down payment and closing costs.

Financial Empowerment Partnership: Offers financial literacy workshops and one-on-one counseling.

Local Credit Unions — Fed up with studies revolving around banks? Try a local credit union that has great interest-friendly loans like Dover Federal Credit Union.

They may even help you get your finances in order and expand your borrowing power.

Maintain a Healthy DTI Ratio

Your debt-to-income (DTI) ratio is the percentage of your monthly debt obligations relative to your gross monthly income. Lenders generally prefer a DTI ratio of no more than 43%. To improve yours:

Look Out for New Debt: Hold off on big purchases until after you get your loan.

Lower Monthly Bills: You can refinance to reduce monthly payments on existing loans.

Accelerate Monthly Payments: Paying more than the minimum amount makes a huge difference in reducing principal balances.

Choose the Right Lender

No two lenders are the same, and you may find more favorable terms and rates by shopping around. In Delaware:

Shop Local Lenders: Community banks and credit unions tend to have competitive rates.

How To Do It: Compare offers — Shop for rates and terms available online.

Get a Preapproval: A preapproval evaluates your potential to borrow.

Show Financial Responsibility

Show lenders you’re a low-risk borrower by: *

Saving Together: The more they are saving, the more they put effort and discipline into their finances.

Overdraft Avoidance — to keep your checking account from going out of balance.

Documentation: Assemble tax returns, pay stubs and other paperwork that can support your loan application.

Final Thoughts

Boosting your borrowing power takes time, consideration, and effort — but it pays off in the end. Using these tips and available resources throughout you can be styled as the perfect candidate for loans and achieve all of your financial goals.

Whichever route you prefer to buy your perfect abode in Wilmington, invest in expansion in Dover or experience the cash needed to start a new journey; improving your borrowing capability is the first step towards monetary success. Join now — so you can take control of a better financial future!