Poor credit loans are becoming more popular. Poor credit can happen to anyone. Maybe you need a poor credit loan because you missed a couple of payments on a prior loan, let your mortgage get in arrears, had a judgment against you or maybe even problems with your credit cards. Sometimes bad credit is due to circumstances that are out of your control, such as a divorce.
Until recently, a bad credit score would have made it close to impossible to get a loan. However, an increasing number of lenders are realizing bad credit is not the end of the world. Many lenders have come up with an array of secured poor credit loans.
A poor credit history does not necessarily mean you won’t be able to obtain a loan. In fact, homeowners are very likely to obtain a poor credit loan.
Poor credit loans are easy to apply for and can even be done online. Even with a low credit score and problems with prior loan payments, poor credit loans are available to homeowners. The equity in your house can be used to secure a poor credit loan.
Your credit score, also known as a FICO score, informs lenders what type of credit risk you are. A high score says that you pay your payments on time. However, a low score says you are at a greater risk for letting payments go unpaid.
Since credit scores mainly focus on the previous two years of your credit history, you can increase your score pretty quickly. Although it can take close to a year to see good results, it will be worth the wait.
If you are looking to increase your credit score there are some easy steps you can take. First, start by contacting the top three credit bureaus, TransUnion, Experian and Equifax. Analyze each report for both accurate and inaccurate information. Often, people will find simple mistakes on their credit report. Mistakes can unnecessarily lower your credit score and cost you more money in interest. Therefore, it is very important to make sure you report is correct.
After your have your report correct, begin making monthly payments on time. This alone will improve your credit score. A late payment will quickly knock down your credit score. Therefore, always pay your bills on time.
Next, take measures to decrease your debt. At least 50% of your credit should be unused. For example, if you have a $30,000 limit on your credit cards, you do not want more than $15,000 charged on them. In fact, the less that is owed, the higher your credit score.
Even though you have a bad credit score, there are still lenders out there willing to loan you money. Although there are steps you can take to increase your credit score, a loan may be needed in the meanwhile. Therefore, poor credit loans can be very useful.
Michael Louis is always on the look out for a good deal and enjoys sharing his secrets. Did you find these tips useful? You can learn more at All About Mortgages