There is no such thing as a quick fix for bad credit scores, but you can apply for bad credit loans to improve your credit score. Consistent repayments can be your best option in rebuilding your credit history and paying for your current needs.
A credit score of 509 or less (VedaScores) means you cannot have the best interest rates on loans, mortgages and refinancing because you’re a high-risk borrower. It sounds unfair because even responsible borrowers with only have one credit card and pay the balance in full and on time, can have a low credit score. It happens when you have a high utilization or a percentage of your credit limit being used. A good example is when your credit limit is $1000 and your statement balance is $200. In such a case, your utilization would be 20% and it would alert the banks that you cannot control your spending.
Improving your credit score takes time because your score is a reflection of the pattern of your credit payment. However, the fact that it puts more emphasis on your recent financial information is encouraging.
Obtaining bad credit loans can be a wise move to help you get started on the following steps to a better credit score, and hopefully, to financial freedom:
1. Pay off outstanding debts.
Categorize them into priority and non-priority debts. Use a portion of your bad credit personal loans to pay off your high-priority debt. It’s either you target high-interest unsecured debts before they get out of control, or you make the minimum payments on secured debts to save your assets tied to the debts.
Before you pick bill payments, make sure that you obtain your credit report first. It will serve as the basis of your next move. Aside from your basic information, your credit report can show you where to get started in your debt-payoff. It shows your open and closed accounts, complete credit accounts payment history, recent applications for loans and credit, and collection accounts for unpaid debts sent to collection agencies.
2. Cover your basic expenses
Don’t be too overwhelmed by your debts. If you took out a loan because your income is not enough to pay for everything, maybe it’s time to reconsider what is essential and what is not.
You can do this by prioritizing your expenses. Create a budget by starting with the main reasons why you took out a loan. Pay it off. When there is money left, ask yourself which aspect of your finances you need it most.
3. Start over again
You may be getting bad credit loans to pay for medical and personal expenses or to pay for the outstanding balance of other loans. However, putting away enough money to help you increase your income can help you get the most from your loans so you can live comfortably and within your means.
Are you in urgent need of personal loans but banks refused you because of your poor credit history? Contact us today and our bad credit loans team will help you find the most suitable option for your financial and personal needs.