Have You Had To Resort To Loans For People With Bad Credit?

June 25, 2020
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Have you ever taken out loans for people with bad credit because you have no credit cards, bad credit and absolutely zero chance of getting a loan from a bank or lending institutions?

If this is the case then you really need to start considering cleaning up your credit report so you can one day buy a home, get a car and get approved for credit cards.  Wouldn’t it be nice to be able to stop having to turn to loans for people with bad credit and be able to get the things you wanted on your own credit, your own financial reputation?

People with good credit don’t have to pay the interest rates that people with bad credit do.  It’s certainly not fair that the high interest rates even exist, but they do.  To get started on repairing your credit, order your credit reports from the three agencies.

After you get your reports (you can get a free report every year), start to go through them to understand what you need to dispute or have removed from each one.  Read below to understand the items you see in your credit reports.

One of the first things you will see on your report is your personal information.  The next thing you will see is a listing of all your credit accounts.

Lastly, you will see a listing of negative items.

FICO scores range between 300 – 850.  The higher the score, the lower the risk.  There are five categories that are taken into consideration when determining your score:

The first is payment history. Obviously a lender wants to make sure that you have paid your accounts on time as this means that they will most likely get paid on time.

The second is amounts owed. The fact that you have a credit account and owe money on it doesn’t necessarily translate to a low score. However, if you have an account where all of your available credit has been used, then this can make you look over-extended financially.

The third is credit history.  Approximately 15% of your FICO score relates to your credit history. A long credit history does fare well, but even individuals with newer credit history but a more current payment history will calculate to a better score.

The fourth factor is new credit. When you open several accounts within a small time period, this can represent a greater risk for the lender.

Lastly, they want to know the different types of credit you currently have. This category usually doesn’t contribute much to your score; however lenders want to see a healthy mix of credit cards, installment loans, store credit, mortgage loans, etc.

Now, don’t you feel a little of the weight lifted off your shoulders?  Maybe now next year when you go on vacation, you can actually take out a personal loan with a lower interest rate then having to use loans for people with bad credit again.

It is always great to know that there are loans for people with bad credit in case of emergencies and very important matters. Everyone should be able to have access to money one way or another.

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