How Some Bad Credit Score Holders Manage Quick Loans

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How Some Bad Credit Score Holders Manage Quick
Loans How Do Some Bad Credit Score Holders Manage
Quick Loans?
It seems like a universally known fact that one's
credit score is the key to their options of
borrowing money through loans. However, experts
and some borrowers know that the credit score
system, like almost any other system, comes with
its own pros and cons and it has its own
limitations and flaws. Apart from that, the
market also needs to accommodate people with poor
credit scores as they could still be in need of
loans. And yes, today's market does have answers
- there are solutions available out there, that
help borrowers get loans despite poor credit
scores. Here, you shall find a quick round up of
the options and how best to utilize them. As a
bonus, I share a few links to a successful
service that my acquaintances have used during a
time of need.
CREDIT SCORE
Credit Score How Bad is bad? If you've landed
on this article, you probably have a clue about
what credit score is, so I shall just share a
simplified definition of it in a way that a
reader of this article can use to understand it.
Credit scores are maintained in most countries
for all adults. These are scores maintained via
tracking credit-related transactions which aim to
represent the credit health of an individual that
is used by lenders, employers, insurance
companies and a few other entities, to understand
certain aspects of your financial health. A
person's FICO credit score would range between
300 and 850, with 850 being the highest credit
rating possible. FICO is the most widely used
credit rating. Simplest ways to
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maintain good credit scores is to repay debts on
time and to utilize smaller percentages of your
credit limits.
FICO Credit Score FICO Rating
800-850 Exceptional
740-799 Very Good
670-739 Good
580-669 Fair
300-579 Very Poor
If your credit score is in the "Fair" range, most
loans would start to get expensive - the interest
rate quotes you receive shall be on the higher
side. Personal loans may be harder to get than
home loans and car loans. If you hit the "Very
Poor" range, it gets much more difficult. Most
loans are not available to you. In most cases,
non-bank direct lenders, some very short term
loan apps and credit card loans (only from
pre-existing credit cards) would be your only
options. Since the product offers of very short
term loan apps are less tested, fairly new
options which can be lesser reliable and very
expensive, I am avoiding them for now. I believe
that the market is yet to gain more experience
with those services before they become worthy of
a fair mention. Do understand that a borrower's
credit score is a reflection of how safe it is
for the lender to offer you a loan, which is why
all loan options available to a low credit score
holder tend to be rather expensive. That said,
let's dive a little deeper into the comparison of
the two more reliable and established options.
Bad Credit Direct Lender Loans vs Credit Card
Loans Bad credit direct loans are the more
popular loan product amongst the two, and chances
are that you're easily eligible for one. However,
that benefit does not come without a cost.
Non-Bank direct lender loans include products
like installment loans, cash advances and payday
loans. Typically, these are all short term
personal loans which can be used by borrowers in
emergencies. They're available through lenders
reachable through mortgage brokers or directly
online as well as in pawn shops. Cash America
Today an example of a prominent direct lender of
cash advance loans for bad credit score, based in
the US. In terms of APR, that is one way to
measure the cost of a loan, this sort of a loan
tends to be expensive. However, in the US, direct
lenders of such loans do not use compound
interest on their loans and this makes it easier
to understand how to manage one's
expenses. Credit Card loans for bad credit score
holders are not easily available. Firstly, you'd
need an active credit card which is not expiring
in the next few months. Secondly, there are some
services that still check our credit score before
approving the Credit Card loan. The interest rate
on such a loan is likely to be lower but it is
compounded so in a longer term, it may be adding
up to a larger amount of repayment in total.
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How to Get a Direct Lender Loan Safely Direct
Lenders tend to have flexible loan options on
offer. Some are attractive, some are expensive
but some might be too good to be true and these
are the ones you need to beware of. While
choosing to take a loan from a non-bank direct
lender, it is important to know that your lender
is legitimate. Here are some signs to look out
for 1. Online presence the lender should
have a secure website and some good reviews
online 2. Deposit/Payment legitimate loan
lenders wouldn't ask you to pay or deposit money
to get a loan or apply for one 3. Suspicious
Offers Some lenders or websites can claim to
make offers like first month free, etc. Be
informed that these are likely to be misguiding
or illegitimate offers/lenders 4. Asking for
irrelevant personal information or passwords A
direct lender shall need your bank details, name,
address, SSN, salary slips and some other related
information that seem relevant to a loan. What
they do not need is a prepaid credit card number,
account passwords, your bank customer ID and
other information that can jeopardize your
financial safety. Some scammers do pose as direct
lenders to gain access touch information from
people 5. Contact Details and Address Direct
lenders that are registered and accredited would
reveal valid contact details on their website or
in their shops 6. Registrations and
Accreditations Look out for security
certifications on the website, accreditations
like BBB (Better Business Bureau) and
registration details of the lender to be sure of
their recognition as a legitimate lender.
How to Work on Your Credit Score? I assume you
read all the till here because you or someone you
wish to help, has a bad credit score. The good
news is that this can be changed over time and
you don't have to be rich to change it. It just
needs a little understanding of the system and
the work can begin! So let's enlist actionable
steps that can help improve your credit score. 1.
Verify your Credit History The system is not
fool proof. Some details and transactions can go
wrong and they do. So if you doubt that your
credit score is low, request for a hard credit
check and verify to see if all the transactions
are tracked well and accurately. If not, filing a
complaint usually solves the problem. In rare
cases, one may need a consultant to help solve an
issue. 2. Focus on What to Improve Credit
scores reflect your promptness of payments of
bills and debts, percentage of outstanding credit
that you avail, how many loan products and
inquiries you've made for loans, how much of your
available credit you use and how much of the
outstanding credit is carried forward
periodically. Whatever you may lack in, it's a
good idea to focus priorities on improving each
that needs attention. 3. Reduce the Percentage
Used, of Any Credit Product You Use If you have
the option to increase your credit limit or to
distribute your debts across multiple products,
doing so is useful for credit score improvements.
The idea is to reduce the percentage of each
credit product that you use, against the limit.
For example, if two credit cards allow you to
spend 10,000 each while you need to spend 6,000
in total, it is wiser to spend 3,000 on each
card if possible. This is also a reason why
closing credit card accounts is not a good idea
when working on your credit score.
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4. Take a No Hard Credit Check Loan If you
need a loan with a bad credit, applying for a
loan with performs a hard credit check, will be
detrimental for your credit health. A loan that
does no hard credit checks can however, be
useful. 5. Repay Loans on Time Timely
repayment of loans and due bills is essential
when working towards improving one's credit score.
Conclusion If you happen to have a bad credit
score and are in a need for a loan, I would
suggest that a Credit Card loan is good if you
have the option available to you. Do make sure
you calculate how expensive it is, before you
finalize this option. You may need an EMI
calculator for this as Credit Card Loans usually
tend to attract a compound interest which usually
ends up being more expensive than it seems at
first glance. The other reliable option and the
one that's easier to be eligible for and quite
often faster, is the online direct lender loan
for bad credit score individuals. It is important
to understand the service you choose and to know
that your direct lender is legitimate. There are
mortgage brokers out there who can help with
this, but their services only add to the already
expensive loans that serve individuals with poor
credit history. So, as I mentioned, I am sharing
the link of the service that an acquaintance of
mine used successfully. You could check it out
right here if you need money today -the service
by CashAmericaToday delivers loans within a day.