Getting a loan with bad credit does not have to be a nightmare, in fact if you do the things that follow, you will have an easier time, and you may help yourself in other ways too. If you can avoid getting a personal loan, that is the best way to go, but sometimes it is unavoidable and the only choice you have is to borrow some money. We all know that we should avoid at all costs the pay day advance operations, I do not really think anyone now in days is unaware of the shady practices, although legal, and super high interest rates.
But from time to time true emergencies happen, and you just need to borrow some money. For example and quite commonly, homeowners have major issues that, while possibly covered by homeowners insurance may require immediate cash to pay to a contractor to fix the problem, and there is no real time to wait, for example a whole in the roof due to storm damage, or the like. This is a time when you will need to try and get a loan, and quick, and if your credit is less than perfect, you will need this road map below.
Here are a few steps to use to avoid headaches in the process.
- Check your credit regularly.
- Improve your credit score
- Find direct lenders
- Go to your regular bank or credit union
We will go through each one and give you the right path to take to make sure you get the best loan. No, first off, you should make, or already have a good household budget in place, if you don’t do so now, and see what money you have coming in, and what is going out, and what is left over. Doing this will help you decide which loan and amount is right for you.
Check Your Credit Regularly
In case you do not already know, you are entitled to one free credit report, annually from each of the three credit reporting agencies. You must pull your credit, annually to make sure that the reports are accurate, and that, if they are not you take the proper steps to fix them. There are surprisingly easy ways to correct any mistakes and you can do them yourself.
Improve Your Credit Score
Now it sounds hard, and it is often hard, but there are little things that you can do to insure that you score does not plummet, on such way is to make your payments on open accounts on time, try and pay off what you can. One sure fire way to have a credit score, and the ability to get a loan decrease is to have to many “pulls” on your credit, there are two types of “pulls” and hard pull and soft pull. According to creditcarma.com they vary, but can have a huge impact on your report and score, a soft inquiry is for example one that happens when you apply for a job, or have a background check, hard one usually happen when applying for a loan. Ask them which one they plan to pull.
Finding Direct Lenders
Believe it or not, applying directly to lenders is better for you, and your sanity. If you apply on-line for a loan, like many of us do, you wan to make sure that you look to see if the company or website that you are on is actually a lender or just a lead generation site, because if it is the latter, you can expect to be bombarded with calls and emails, which can lead to more confusion and complications when trying to choose the right loan.
Go Right to Your Bank or Credit Union
Most people do not think to go to the bank or credit union where they do their everyday banking, and I am not really sure why. They have all your information, and history right at their fingertips, they probably know you by face and have a relationship with you. And with your bank you can more than likely have a direct withdraw from your account for the payment, how much easier could it be.
Times may get rough sometimes, and the need for a personal loan will come up. In order to insure that you are up to the task of obtaining one, even if your credit is less than perfect, you should follow the steps mentioned to make sure that the process is painless and stress free. Even if you do not seek out a loan, the steps mentioned above will give you the confidence you need to improve your credit score in the event an emergency happens and you need to seek out that loan.