Get Credit Even if You Have a Bad Credit Score With These Tips
If it were a perfect world, you wouldn’t have to worry about your credit score. In fact, you wouldn’t have to worry about securing credit because you would have enough money to last a lifetime. The reality is a lot different, and that means that most people have bad credit. Bad credit is one of those nasty terms that can dictate your life in a lot of ways. Without a positive score, you will struggle to secure a loan. And, without a loan, you may not be able to pay the bills or keep food on the table. If you have bad credit, you might be worried about your future. Although it looks bleak at the moment, it isn’t as bad as you might think. Why? The reason it isn’t as bad as it seems is that there are ways to get credit even if you have bad credit. Yes, it is true, and all you have to do is follow these tips.
Improve Your Credit Score
Just because you are in the red doesn’t mean that you will stay there forever. The truth is that you can repair your credit score, and you can do it quite easily. All you need are the tricks of the trade that will put you on the right path. For example, you need to start making a hole in your debts as soon as possible. It isn’t important that you eradicate your debts all at once because that is unrealistic. What is important is that you show lenders you are making a conscious effort to lower your debts. A good tip is to start with the biggest debt. The reason is that this debt incurs the most interest, while the smaller debts only have small levels of interest. So, you can afford to let the others amount for a while as the interest is minimal. As soon as your rating improves, the lenders will start opening the doors again.
And Maintain It
Once you do all the hard work, it is irresponsible to flush it down the toilet. Ultimately, you have to keep your score at a decent level if you want to secure a fresh line of credit. Just because you have worked hard to improve your score once doesn’t mean anything if it hits rock bottom. All the lenders see is that you did it, and then you let it go again. To them, that makes you just as much of a risk as before. In fact, it makes you more of a risk because you have done it twice. The key is to keep on top of your payments. As long as you are punctual and pay on time, you shouldn’t have any problems. There is a variety of other methods that you can use, but this is the easiest. And, it is the simplest. Anyone with any organizational skills can pay a bill on time.
Bad Credit Loan
Believe it or not, there are lenders that don’t care about your credit. Okay, they do care about your credit, but they are more flexible. So, even if you have bad credit or have a bad credit history, you should be able to get a new line of credit. What you have to do is find them first, and then decide which offer is the best. To find them, take a look at installment loans and other loans on sites like Personal Money Store. It is okay to go to a lender and ask for a quote on a deal without any help. However, it is a lot more hassle and a little bit dodgier. That isn’t because the lenders are con artists, but because you lack the pertinent knowledge. With a comparison style site, you can trust their judgment. It is important to note that the interest rates are higher because of the risk. As such, you need to make sure you are fine with the repayments.
Credit Union
Although bad credit lenders are legitimate in most cases, credit unions are better. Typically, the general public run and owns them, which is to your advantage. For one thing, they understand what it is like to be in your situation. More importantly, they are non-profit organizations. The result is that they don’t care about you credit rating. The entire point of a credit union is to help people in need through low-interest loans. If there is one near you, it is well worth a visit. One thing to remember is that they only deal with small loans. Anything larger and you will need to see a bank manager.
Family Loan
A loan doesn’t have to come from a bank or a bad credit lender. If your family or friends have the cash, they might be willing to help you out in your time of need. From your point of view, this is far better scenario than going to the bank. For starters, you don’t have to worry about high-interest rates or defaulting on the loan. As a result, the terms are much more favorable and give you a lot more flexibility. However, you should be aware of the risks before you accept the terms. Borrowing from a family member or a friend is dangerous in a lot of respects. Lots of people have caused irreparable damage to their relationship fighting over money. With that in mind, you need to know the basics of a family loan. The main and most important one is that you pay them back every month. Set up a direct debit and transfer the money into their bank every month. That way, you don’t have to worry about missing a payment. For more tips, take a look at this link.
Guarantor
There is a way to get a loan from a bank with bad credit, and it involves a guarantor. As the name suggests, the guarantor is a person that guarantees to pay the loan if you default. Banks and lenders are a lot happier to offer you a loan if you have a guarantor because it gives them a safety net. The only problem you will face is finding someone that is willing to front the money. As you rating suggests, you could default on the loan. That means there is a reasonable chance that they will have to cover your back in the future. There is no way around it – you need someone that is willing to step up to the plate. You can assure them that it won’t happen, but that is a mistake. Coincidentally, you can’t guarantee the future. So, instead of telling them that they won’t have to do anything, you should inform them of their duties. Hopefully, someone has the money and inclination to help you out of a tricky situation.
Home Equity Option
Do you have positive equity? If the answer is yes, you can get a low-interest, tax-deductible line of credit. What lenders do is accept your positive equity as a form of payment, and give you a loan that correlates to your equity levels. Of course, you are potentially putting your house at risk. Anyone that defaults on this loan will end up losing their property as it is security against the loan. But, if you have a steady stream of income, it could be a good option. Also, the fear of losing your home is a good motivator. No one wants to deal with house repossession, and they will do anything to stop it from happening. As a result, you will tend to pay every bill on time with regards to your home equity credit. Sure, it’s a risk and a pretty big one. But, it might be your only option.
Bad credit is a reality for some people, but it doesn’t have to be anymore.
