Most of the people become apprehensive when the term bad credit is used along with a plan to seek loans. It is common knowledge that loans are hard to acquire when your financial history is poor. Banks typically take long for reviewing average requests and may not approve you at all. Fortunately, people still have the option of consulting brokers or direct lenders.
Understanding Credit History
The credit history report of an individual is the record of their ability to repay debts. Lenders will use this information to determine the person’s responsibility in repaying borrowed money. A typical report contains the following details:
- Number of opened credit accounts
- Types of opened credit accounts
- Money owed
- Available credit used
- Are bills paid on time or not
- Number of recent credit queries
The report also summarizes information regarding any existing bankruptcies, judgments, liens or collections.
Read More: Easy-fix for Your Credit History
Understanding Bad Credit
A person who has a poor financial history will face trouble in getting loans. The reason is that lenders will view them as unreliable borrowers. However, you do not have to worry! A low score can be improved!
Honestly speaking, it is hard to say what kind of report can be considered poor. Nowadays, there are many lenders who can lend you money without any history checks. One lender may reject a request but another one will accept you.
How to Get Loans?
You have two options; namely brokers and direct lenders. Loan brokers do the research on your behalf and connect you with a lender while direct lenders do business directly with the applicant.
It is recommended to choose direct lenders over brokers. This option is safer and more convenient. You may have to spend a little time and effort in finding the best lender yourself but it prevents the risk of fraud and hidden charges.
How to Select a Good Lender?
To shortlist a few suitable lenders for your specific application, you can run a search on direct lenders in your area. You can also search on lender directories that return lists of suitable companies based on given criteria.
It is suggested to shortlist a few lenders and then compare the features. You should also find information on their websites like:
- Company history
- Types of services offered
- Number of successful approvals to date
- Reporting to credit bureaus
- Certification by a financial authority, etc.
These details are important to determine if a company is reputable, transparent, and trustworthy.
Read more: How to Find a Trustful Money Lender?
What is The Final Step?
Once the company has been finalized, you can fill out an online application form. Completed and submitted in minutes, you will be sent a contract. If you agree with the terms and conditions, you sign it. The money will be yours within 24 hours or less.