Credit report reveals your credit score, which is crucial for getting any kind of loan approval. Poor credit score does not mean you are a bad person, but shows how punctual you’ve been in repaying your debts.
Basics of credit score
Credit score is a rating using numbers between 0 and 999. It determines a person’s credit risk level. For example, score close to 0 means your possibility to default on repaying carries high risk. Score close to 999 means more trustworthy and credible or you are less likely to miss repayment deadlines.
Actually, credit score does not define your future potential but is a summary of credit history. Credit history is displayed in the form of score before the lenders, so they can decide if they wish to approve a loan or not. If you belong to poor credit score category then it may seem impossible to get short term loan approval.
Fortunately, LoanPig – bad credit loans platform has many lenders that can help you with low scores. All the lenders on this platform are FCA certified, so you don’t need to be concerned about getting scammed.
Tips to find best loan terms with bad credit
- Bad credit scores mean high interest rate but there are lenders who offer competitive reasonable rates.
- Never get locked in long and fixed repayment plans but get flexible terms.
- Avoid lenders, who are not clear and transparent in their offerings.
- Research lenders and read customer reviews, so as to make sure that you sign up with a reputable lender.
Online lender is a great option for bad credit loan but there are other alternatives you can consider.
Besides Online Bad Credit Loans Consider Other Options
Ask friends & family
Personal relationships and financial matters must never be mixed but if you are confident about your loan reasons then you can seek their help. Make sure to set loan terms, if problem arise but make sure that the repayment is done on time because you don’t desire to ruin relationship due to financial disputes.
Get loan cosigner
It is hard to seek financial help from family or friends but they can be helpful in supporting you as a cosigner. Cosigner will generally be a person whom you trust and who trusts you. If the cosigner has a strong credit history then it will dramatically reduce the interest rate. If you default paying the cosigner will be responsible, so ensure that you take help as a cosigner if you are certain to repay the loan.
Opt for secured loan
Use a valuable asset like car or home as collateral against the loan. The lender looks beyond your bad credit history, as you are also taking a risk. The interest rate will also be low even with bad credit. Failure on repayment against secured loans permits the lender to sell the collateral and claim their loaned amount with interest.
How to spot bad credit scams?
- Upfront fees
- Spam like communication
- Odd names
- Scare tactics
- Unnecessary request for personal details
Bad credit does not mean you are not eligible to get a loan but there are many precautions you need to take as mentioned above.