A loan with bad credit history may seem far-fetched. But if you’re suffering a credit score setback, it’s more within grasp than you’re probably thinking.
Credit agencies may feel intimidating, but we’re here to ease some of the fears they bring. In the following article, we’ll be discussing the four main factors you need to keep in mind.
Check out for more on how to improve your credit score.
1. Mental Preparation Is Important
Firstly, make peace with the fact this isn’t an ideal situation. It’s a way through. Start your journey by accessing your credit score.
Credit scores may be obtained free-of-charge from three agencies. They are:
The credit reports will be clear enough for anyone to follow. But just as a primer, you’ll need to know a good score from a bad.
Good scores may not be your concern if you’re reading this. But for perspective, Experian deems positive scores from 670-850. “Fair” (580-669) may still qualify you for a decent interest rate.
Low score loans generally are reserved for individuals with anything below 580. And it can go as low as 300! The big deal about these scores, of course, is that the lower you go, the harder it is to climb your way out.
2. You Have Options
Getting personal loans with low credit scores can make you feel extremely vulnerable. And, in a sense, you are. (More on that in a moment.)
But the number one fear — not getting a loan at all — is one you can put to rest. You have options as a low-score applicant.
Those options include banks and credit unions. The latter is a good choice if you’re set up with one through your employer. Not many people are, though.
Perhaps the surest options are online loan lenders. Some have started to make names for themselves. You probably hear their advertisements on radio and podcasts.
They have high acceptance rates. Just make sure you’re checking with your state’s Attorney General to make sure the company is in good standing. Or, if you want to take out some of the legwork, you can use services like Bonsai Finance.
3. You Also May Help Your Credit Score Along
Personal installment loans with fair credit are possible at better interest rates than the under-580 crowd. And if you’re borderline, you may want to do a little extra work to seal the deal.
That would include obtaining free copies of your reports for any reported mistakes. It also can be helped along by paying off outstanding debts and getting your monthly bills on an auto-draft to avoid late payments.
4. But Prepare for a Higher Cost Loan
Personal loans with no credit check are tailored for low credit scores mean higher interest rates. There’s no way around it. But how much higher?
The same 5-year loan that could net one borrower a 10 percent interest rate could get another a 35 percent rate. It’s that significant.
This means you’ll pay hundreds or even thousands more in interest during the life of the loan. But it also guarantees the funds you need when you need them.
A Loan with Bad Credit History Is Possible
A loan with bad credit history comes with undeniable pros and cons.
But with the right guidance, you can get the best deal possible and begin rebuilding your credit score without worrying about how you’ll pay for those necessary purchases. Contact us today to learn more about loans for bad and loans for poor credit.