Your credit is bad or at least is not where creditors think that it should be. With a credit score below 650, you will have a tougher time securing a loan. Yet, a low credit score does not mean you have to do without credit. Instead, there are some steps you can take to improve your credit before you apply for a loan.
There are three major credit reports that cover nearly every consumer of legal age in the United States. Trans Union, Equifax and Experian create consumer reports and have information about you that they sell to creditors. That information is available to you too, provided you make a visit to AnnualCreditReport.com to obtain your copies.
That website provides one free copy annually of all three reports to consumers who request them. Therefore, obtain all three copies, read your reports and learn what creditors are saying about you. If some of the information is incorrect, then contact the respective credit bureau for assistance. You may need to make amends with a creditor to improve your position, such as catching up on late payments or paying down a large debt. Work on these issues before applying for a loan. Your credit score should rise once your work takes hold.
Talk with your Banker
Where do you do your banking business? If it is with a bank or a credit union, then pay your banker a visit and explain that you would like to borrow money. Working with someone with whom you have a proven track record can be beneficial to you receiving loan approval explains InstaLoan.com.
If your banker hints that you won’t be approved for a loan or get a loan at favorable terms, ask what steps you can take to improve your position. You may be required to pay off some debt first or settle for a smaller loan amount. Take the professional’s opinions to heart because he knows what is best for you.
Consider Family and Friends
Often we are hesitant to discuss our financial needs with a family member or a friend. Perhaps it is fear of rejection. Maybe it is pride. In any case, approaching someone who may be able to assist you is one option here.
Your parents are logical place to start. They know you well and can gauge your situation and your ability to repay the loan. Chances are they also know that if you cannot pay them back, that they’ll work with you.
Look Beyond Your Neighborhood
Your banker may have turned you down, but there are other options for borrowing that can also be considered. A community bank or a financing company are possible options. Another credit union can be considered as well.
Extend your search to the Internet too as there are banks from all over the country that seek to reach consumers nationwide. Some creditors work closely with consumers who have bad credit. Find out what they have to offer and whether you should apply or not.
Bad credit can make it more difficult for you to receive financing. Nevertheless, there are options available to you. Moreover, working on those problems that beset is important too.
Never take the first loan offer presented to you. Consider all options and examine the interest rate and terms very closely. The last thing you want is to be burdened by a loan that you simply cannot repay.