Once you've gotten a copy of your credit history report and you
know your current credit score, you're more aware of the specific
problems you have with getting bad credit loans. If your credit
score is quite low, you may still be able to get a loan, but you'll
end up paying much higher interest rates for the privilege. Often,
loans for people with bad credit are quite small too. You can't
usually borrow tens of thousands of dollars for instance, but you
might still be able to get a smaller loan for one or two thousand
instead.
You can sometimes increase your chances of getting a loan with
bad credit though, if you're willing to do a little bit of work first.
When you got a copy of your credit history report, you were able to
see all of the problems listed on that report that bring your credit
score down. Sometimes you can have some of those items
removed or changed, and this can help increase your overall
credit score.
By law, if you dispute anything listed on your credit report, the
crediting company must verify the entry within thirty days. If they
do not do so within the designated time frame, the credit
reporting agency is required to remove that item from your credit
history report.
So if for instance, you have items on your credit report which are
quite old, you can sometimes get them automatically removed.
Say you have a listing on your credit report which is five years old.
It's a revolving store charge account, but that store is no longer
in business. If you file a dispute, and the store has no one
available anymore to look up the old record, they'll be unable to
respond to your dispute, so it will automatically be removed from
your credit report. The more items you can get removed, the
higher your credit score will be.
Now, this can backfire on you too. If you dispute something and
the company has people available to verify the credit report item,
that credit report could be updated with the current data. And
sometimes when this happens, it shows as a new credit
problem on your credit report.
Once you've verified your credit report is as clean as you can get
it, and your credit score is as high as you can get it at the
moment, then it's time to start looking for finance companies
who will provide loans for people with bad credit. Keep in mind
that you can't always get the full loan you want. Sometimes you
have to start with a very small loan, such as $500, and build up
from there.
Most lending companies who provide loans for people with bad
credit will often ask you to explain your credit history problems.
This helps give them an idea of why you've had credit problems
in the past, and they're able to get more insight as to the kind of
person you are financially. If many of your bad credit problems
are due to circumstances such as emergency medical bills, but
all other accounts and bills are paid on time, they're more likely
to approve your loan because there are valid reasons for the
past credit problems listed.
In almost all cases though, finance companies who provide
loans for people with bad credit will charge much higher interest
rates than normal lending companies do. So be prepared to
answer plenty of questions about your credit history, and be
prepared to pay much more for the bad credit loan in the long run.
|
|
|