Bad credit is a thing that happens to many of us from time to time. You may have received a bad credit rating because of purchasing mistakes that you made, have been forced into a situation where you had no other choice accept to file for bankruptcy or have many small things on your credit file. The best cure for bad credit is time and paying all of your bills on time and in full.
Just because you have bad credit doesn’t mean you can not get a loan. In fact it may be in your best interest to get a bad credit loan to help rebuild your credit. This is very important if you have a bankruptcy on your credit file. With a bankruptcy on your file it is harder to get a loan and you will pay higher interest rates than almost everyone else. However, if you do not have a few loans in good standing on your credit report before your bankruptcy is removed from your credit report it may be almost impossible to get a loan.
Getting a bad credit loan will require some work from you. You will need to work to find a lender who will consider you for a loan. If your FICO score is below about 640 most banks and financial institutions will not lend to you. This means you are going to have to seek out a third party lender and of course it will be more expensive. Each third party lender has it’s our criteria for lending money and thus you may have to visit several lenders in order to secure your loan. Some lenders will not lend if you have a bankruptcy, others may require some sort of collateral and others will lend to you simply because you have no late payments showing on your credit report.
To save yourself some time and trouble there are a few things that you can do to prepare for the lending process. First you should obtain a copy of your credit report and examine it for errors. Your credit report will tell you your FICO score as well as show you what lenders will know about you and what is impacting your credit score. The second step is to do a personal budget. Itemize all of your assets and liabilities. Make a cash flow statement up so that you can determine how much a month you can afford to repay your loan.
Now that you are armed with the essential details of your personal credit you have the option of letting your fingers do the walking. While most places will not give you a firm answer as to whether or not they will lend you money until you go there, many will let you know if they would consider you. Call ahead and mention you FICO score assets and monthly income and then ask if it is worth you time to make an appointment. When searching the phone book for possible lenders make sure you also check the Internet. There are many national and online companies that may also lend to you.
Having bad credit does not mean you can not get a loan, but it does make it harder and more expensive to get one. If you have poor credit it may be in your best interest to obtain a few small loans in order to rebuild your credit and prove that you can manage your debts and handle more responsibility. Each time you maintain a loan in good standing for a year you will be rewarded with more options and lower interest rates.