Having bad credit can be a real nightmare. It seems that without a decent credit score, it is nearly impossible to find any lender who is willing to extend a personal loan to you (or any type of credit for that matter). Getting the help you need with your poor credit can be as easy as qualifying for a bad credit loan that will help build you credit back up to a level where you can qualify for all types of financing.
A bad credit personal loan is a loan that is written for those individuals whose credit scores are usually below 600. Anyone with poor credit is best advised to always check their credit report to determine the severity of their credit situation and also to assess their report for erroneous information that could be holding them back from having a better FICO score. You can receive one free copy of your credit report annually from Experian, Equifax, and Trans Union; these are the three major bureaus that lenders report consumer credit performance to. If you find an item on your report that has been reported in error, contact the bureau holding your report immediately. It is pertinent to check your report with all three bureaus as they can vary greatly in the record that they have for you and also because not all lenders utilize the same bureau when determining eligibility for credit.
Applying For Your Bad Credit Personal Loan
To be approved for and receive a bad credit personal loan, you will need to provide your lender with information about your current employment status as well as your financial status. If you are married, even if both of you have bad or poor credit, applying together for a bad credit loan improves your chances of receiving the loan product because lenders want to see that you have sufficient funds coming in that can cover the monthly payments .
Borrow $ 5,000 And Rebuild Your Credit, Too
Most bad credit loans are written for $ 5,000 or less, although having a good income can help you qualify for a significantly higher amount. Be certain that you are careful to borrow only the amount that you need when taking out your poor credit personal loan. Additionally, you should never agree to a payment that is beyond your budget as your credit will only worsen if you default on your loan agreement.
Your bad credit loan application may be helped along its way to approval by pledging security or collateral for the loan. This can be in the form of a home or other real estate, or other valuable property such as a car or other vehicle. By having some type of collateral to hold on to, the lender is better assured that they will receive payment for the loan; if not, they have the right to seize and sell the property that is committed during the loan application process.
Once you have received your bad credit loan implemented, it is vital that you pay your monthly payments in a timely fashion. Receiving a bad credit loan gives you the opportunity to put positive facts onto your credit report that can help you raise your score as most of these types of loans report either monthly or quarterly to the bureaus. By being a good paymaster of this bad credit personal loan, you will be setting out on the road to financial recovery where you can borrow even more money with better terms and lower interest.