Having bad credit must mean that getting a loan is entirely impossible without excessive rates, surely? Wrong! It is entirely possible to acquire bad credit loans from direct lenders, without having to pay extortionate amounts of money. So, what are bad credit loans and how can you acquire them? We explore below.
What is Bad Credit?
The term “bad credit†is an indication that you have a poor or insufficient credit history profile. If this is so, many establishments will view your financial availability in a negative light.
Each company has a different set of criteria in deciding upon whether your credit history is too bad, so there are some opportunities out there, even for those with a poor credit history. Causes of a bad credit score include late payments, whether it’s bills, loans, or whatever other repayments you were supposed to make.
What are Bad Credit Loans
As the name suggests bad credit loans are a form of short term loan designed specifically for individuals with a less than perfect credit history. Loans for bad credit often have larger interest rates, but this is not always the case! Many lenders such as Payday Loans Net allow for those with a poor credit score to apply, with no strings attached. Within the approval process, a trusted direct lender such as these will simply assess your current affordability to make prompt and full repayments of the loan you have applied for, within the specified timeframe that has been agreed. There is certain action you can take to improve your credit score, and although it is somewhat of a slow process, all hope isn’t entirely lost.
Improving Your Credit Score
Your credit score by no mans defines you, and there are various things you can do to get yourself out of an uncomfortable situation such as this. If you are able to take out a loan with bad credit, and then make the adequate repayments in a timely manner, this will actually improve your credit score, although it may take some time. You can even monitor your credit score by requesting a credit report once a year, allowing you to track how the decision you make thus forth are influencing your current credit history. Factors that improve your credit score are as follows
- On time payments of bills, loans and any other debts will have a positive influence.
- Low balances on your credit cards and loan accounts
- Older credit accounts, providing proof that you can be trusted with money in the long term
- Few inquiries into new credit will also show that you are trusted with your finances, so keep these to a minimum
On the other hand, factors contributing to a poor credit score to bear in mind include:
- Late or missed payments, showing you are an irresponsible borrower
- High credit card balances
- Credit collections
To improve your bad credit score, taking out a bad credit loan and making the adequate repayments may well be the first step. Follow this guidance and recover from your financial mistakes today.
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