The credit score is what enables every financial organization that you approach for this purpose, to take a stand on whether they should accept your application for a loan or not. All the numbers are recorded and filed under a single history, and this is what banks and other lending organizations look to, should you apply for a loan. In short, your credit history is what determines your eligibility for a loan from these agencies.
But what happens when you have a bad credit score and in need of loan on an urgent not? Well, there is nothing to worry in this case in today’s world. A bad credit score can happen due to a wide range of reasons – could be because you have not repaid your loans on time, delayed payment of your phone bills or even a parking ticket that you left unpaid.
Whatever is the reason, a bad credit score is definitely not a term that wards off your route to avail a loan. There are several financial organizations and banks that give you an opportunity to apply for a loan without having to worry about the bad credit score that you hold. All that you are required to have is a regular monthly income credited to a bank account which is preferably a savings account, are not facing a severe debt situation and are paying your bills on time. With these few things under consideration, applying for bad credit loans is definitely a possible thing.
Importance of a FICO Score
A FICO score is all that one needs to know in order to understand if they fall under the category of good credit score or a bad credit score. When you apply for a loan with bad credit, the financial loan lenders will look up to this credit score in order to understand your standing. This is more important when the loan borrower requests for an extension in the loan period and the loan amount.
The general range of a FICO score is 300 – 850 and people with a credit score under 600 falls under the category of “bad credit score”. However, there is absolutely no need to panic in any such situation. In today’s fast paced world where one needs to fulfill multiple responsibilities and financial commitments, a possibility of missing out on timely payments is bound to happen. The financial loan lenders and banks understand such situations. This is why; you can be honest and open to the loan lender while filling out the loan application form.
The loan lenders do not generally look at the bad credit scores while sanctioning the loans. IN turn, they look up to the loan borrower’s income, recent credit history, income, equity and savings. With these few things in mind, the loan lenders decide on the loan amount and sanction the loan. There are several ways by which you can improve your recent credit history and credit score in turn. By following a few steps, you can very well get over the line of being termed as a bad credit holder.
How to improve you credit score?
Make sure that you pay your bills on time, and do not let your credit card payments go over the due date. Also, try to pay off your mortgage bills and loan repayments on the right time to improve your credit score. Try to reduce the use of your credit cards for purchases, and this will also improve your credit score. Another sure way to make a change is to purchase a pre-paid credit card and pay it off soon.
If you make it a point to improve your credit score, and keep at it by making your payments on time and keeping close tabs on your credit usage, you will be able to increase your credit score slowly but steadily. Many people have the tendency to forget to make payments on time, if this is an issue with you, make sure that you refrain from continuing this practice. Do your payments on time, and check your credit scores every quarter. You should be able to notice the difference within no time.
All these, if done religiously, will help you to get a good credit score soon.