If you have a bad credit history, then finding a loan is not going to be the easiest thing that you have ever done. In fact there are quite a few tricks and tips that will make the entire process of finding a loan easier for you. Let us now look at those tips and tricks. Your Credit Score You can instantly buy and take a look at your credit score from all three agencies at once.
This will give you a better idea as to why your credit score is so low. You need to go through the credit scores in depth so that you can look for any errors or misrepresentations. Although the error might be as small as a wrong entry it can cause a huge dent in your credit score.
Remember, your credit score is what determines your credit worthiness to the lenders. If lenders consider you as a risky customer, then they will be uncomfortable to lend you the loan. So you need to establish a good credit score.
Improvement Tips If your credit score is bad, but not below 580 then you can still get a good interest rate from a legitimate lender. So the trick is to improve your score a bit and then apply for the loan. There are many ways by which you can improve your credit score.
The first and the most important way is to pay off all your bills on time. This will quickly bring about a vast improvement in your credit score. The second way is to pay off your debts rather than moving it from one card to another. Most people think that moving the debt from one card to another will give them a better interest rate and improve their chances of paying off the debt. But the debt keeps piling on and it further degrades the credit score.
If you close multiple credit accounts in a small amount of time, it will cause your credit score to go down further. Even if you close a lot of your existing credit accounts, it will harm your credit scores. So use these tips to improve your credit score. Secured Loans If you have bad credit history or bad credit score then more lenders will be happy to give you a secured loan rather than an unsecured personal loan. A secured loan technically has much better terms and conditions as compared to an unsecured personal loan.
The term period for the loan can be much higher, the interest rates can be much lower, the eligibility criteria is much more relaxed, even the amount that you borrow can be much higher. The only negative side that you can think off in secured loans is that you have to pledge your home as security. In case you defer from the payments, then you may lose your home. The reason the lenders prefer lending you a secured loan is because they consider you to be a high risk customer. In case they have your house as security, then the risk is reduced considerably. You as a borrower need to think twice before agreeing to such a loan.
The last thing that you would want to lose is your home. On the other hand if you are willing to pay on time, then you will definitely like the secured loan. The terms will be much easier for you.
Bad Credit Loans Your credit scores can determine your credit worthiness and your ability to get loan applications sanctioned. But now even bad credit cannot stop you from getting a loan approved.