Bad Credit Score? How to Get Approved in Simplest Ways

Having a bad or poor credit score means increased chances of getting your loan application rejected. Lenders evaluate how risky would it be to lend you money, they look into your credit history and then determine whether to lend you or not. If we go into the traditional ways, then we may find out that mainstream lenders are reluctant to take any risk and they have their own genuine points. It is the impact of the direct lending or we should say as FinTech lending, which has paved the way for loan approval for people with low credit scores.

These lenders have experimented with a few things and that have really worked for the people. For example, they have brought out loans for bad credit with no guarantor needed. It is indeed a huge benefit for the borrowers, as they can secure funds despite not having a pleasant credit history. Such lending options clearly define that even if you have got a bad or no credit score, you can have your application approved. Here is how:

•  Evaluate your Credit Score

It is necessary to have the required knowledge about your credit score before applying for a loan. The three-digit credit score, developed by various credit score agencies can have your application approved or rejected. You can request your credit score from the agencies yourself or alternatively you can ask your lender if they provide a kind of a service. If your rating falls under the bad credit, do not get worried, you still have loan options to utilize for your financial purposes.

•  Avoid taking out a Payday Loan

Many lenders offer you instant approval or fast cash for your needs. These are nothing but a sort of payday loans and often seen as the risky type of borrowing money. Payday lenders will grant you a credit but will charge you for it. Expecting an APR of 350 percent or more can be normal. So, undoubtedly you should drop this option from your list.

•  Bad credit is no more a big problem

Low credit score does not mean you will never have your application qualified but that you have to pay more for a loan. But why pay extra when you can have your credit score improved with some simple easy steps for instance, paying bills on time and having a clear and viable payment history, using credit limit to an extent, paying down your debt etc.

• Personal Loan Lenders as a way to rescue

Sometimes a situation calls for the urgent needs of funds. Building credit score would not be possible in such emergencies. A personal loan lender can be a better option for you in situations. You can pick out even very bad credit loans with no guarantor from direct lender to cover any emergency expenses or just to consolidate higher-interest debt. The chances of loan approval are high because they take into consideration so many factors other than your credit score.

•  Secured loans

In a secured loan you offer an asset, a home or a car may be as a collateral. So secured loan is a good alternative to borrowing with a bad credit score. Lenders can have the possession of the asset to cover the loss if you fail to make the payment on time.

• Get yourself a trustworthy guarantor

For banks it can be quite daunting to approve poor credit loans with no guarantor. It is also true that the direct lenders are giving no guarantor option as well, as discussed above. However, a guarantor or a co-signer can assist you in borrowing with bad credit. The bank or the lender determines the interest rate based on the credit rating of the person you chose as your guarantor. Therefore, prefer someone with a good credit who can assure you to repay the loan. Also, if you fail to make the payment on time, that personal will be equally liable for the consequences.

Thus, you can get loan approval despite having less-than-perfect credit score, although, a few steps are required to do so that have been discussed here. But remember, since you have such adverse credit score, improvement in it is also necessary besides securing necessary funds. 

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Created on Jun 26th 2019 07:19. Viewed 506 times.

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