It’s easy to secure personal loans for poor credit, as compared to the loans that are for people with bad credit rating. The operative word here is of course, “relatively.” After all, all lending establishments and financial institutions offer immediate assistance to people who have good credit scores, but they do drag their feet when it comes to credit rating that is considered below average. Fortunately though, there are some things you can do that can make acquiring personal loans for poor credit a little easier to do.
If you are indeed looking into personal loans for poor credit, here are a few tips on how to “encourage” lenders to fork over financial assistance in a hurry.
1. Pay off all outstanding debts before you apply for new loans. Lending companies usually hesitate more when they see that you have unpaid debt(s) in your credit report. Although technically, this should not affect any personal loans for poor credit you might apply for, some lenders might increase your status as a high risk (non-payment) client. This means that they will still offer you financial assistance but at a much higher interest rate than you ought to have. If possible, pay back all your dues before asking for any more loans.
This tip is also applicable when it comes to your credit cards. Some lending companies do not take kindly to indications that you regularly max out credit cards. For them, this is an indication that you are incapable of reining in your expenses and paying back your loans on time. You do not have to pay back everything though, but you ought to make sure that you pay off at least 50% of the credit limit. This will indicate that you can manage your finances.
2. Make sure that all your papers are in order. This would include papers with personal details like your SSS and your bank account. You also need to fill out application papers. It would suit you better if you provide accurate and up-to-date data. The fewer hassles with paperwork, the faster your application will be processed.
3. Go over your credit report and check for possible inconsistencies or aberrations that may be pulling your score down. Errors are commonplace when it comes to credit reports, and that is to be expected. But these errors can affect your personal loans for poor credit too. In many cases, your “poor” status might be incorrectly classified as bad credit. In which case, you will not only have a harder time being approved by lending companies, but the interest rates on the proffered loans might be 20% to 50% higher than conventional loans. The worst case scenario is: the lending companies might turn you away for having a bad credit score. Try to resolve inconsistencies or aberrations immediately.
4. Put some money into your bank account. Nothing will impress lending establishments and financial institutions faster than you having some money saved up. It does not matter if the amount is small, but it does show that you are willing to save up and acquire money on your own.