If you need a personal loan but have bad credit, Tina can help. I can help you get an offer for a loan and teach you how to improve your credit choices by getting a better score. First, let’s get you a loan offer. Even with bad credit, you may be able to get a loan offer when you work with lenders that specialize in working with poor credit. It takes just a minute to get a quote and it is completely free. Why not get started?
Improving Your Bad Credit
If you want to have the most credit options and loan choices, you need to get your credit score up. Luckily, it is something that anyone can do. There are no secrets to get a good credit rating, it just takes a bit of discipline. Let’s take a look at the factors that go into a credit rating and what you need to do to improve them. I will start with the ones that affect your credit the most and work down.
Biggest Impact: Payment History
This one makes up about a third of your score and has the biggest impact on it. Payment history will always be a major factor in your credit and may even become more important as credit rating methods get updated in the future. If you have a few late pays on your report, they will drag your score way down and keep it there for some time. It will take about a year to really see some improvements to your score if you have a history of late payments.
To start rebounding from late pays, just start paying your bills on time. I know, easier said than done but we can get you there and before you know it, you will easily be able to qualify for a personal loan. First, you need to take advantage of all the tools that will help you pay your bills on time. Set up email and even text reminders when available. If your creditor offers automatic payments, set them up. Give yourself every opportunity to get those bills paid on time.
If money is an issue keeping you from paying your bills on time, you need to make some budget adjustments. If you always find yourself needing money, you are living outside your means and you need to make some changes. Write down all of your expenses and make cuts where necessary. Eliminate dining out, get rid of cable or even move to a cheaper home. Whatever it takes to get you enough money to pay all of your bills and hopefully even save some money.
Very Important: Credit Balances
The balance that you keep on your revolving credit is the next biggest factor. It is called credit utilization and if you are using too much of that credit, your score will suffer. It could be giving you bad credit and keeping you from a personal loan. You want to be using 30 percent of your credit or less. Keep it under 10 percent for the best results but if you can get it under 30 percent, you will notice a big change to your score. So, if you have 1000 dollars in credit, do not carry a balance of more than 300 dollars. It is that simple
If your cards are all charged up, it can seem like a daunting task to get those balances paid down but you can do it if you take it step by step. If motivation is a problem. start with the lowest balance card. Pay the minimum payment on the others but as much as you can on the low balance credit card. This will allow you to completely pay off a card quicker, which is very motivating.
Once you have a card paid off, stop using it but do not close the account. If you close an account, it would decrease your available credit and actually lower your score.
A Strong Factor: Credit Age
Another factor that is in your score is the age of your credit. This takes into account the age of your oldest credit file and the average age of them altogether.
There is not a lot that you can do to make the age of an account any older except to not close an old account. If a credit card is your oldest account, keep it open if possible.
Your average age is a factor that you can help by not opening a lot of new accounts. If you open several credit accounts, it will lower the average age and could impact your score, so keep new accounts to a minimum.
A Moderate Factor: Credit Mix
The different types of credit that you have will also make a difference in your score. If all you have is a few credit cards, you might not be able to get the best of scores. Student loans, mortgages, installment loans and credit cards can all add some variety to your credit profile. This will give you a better score. That personal loan that you are trying to get right now might even improve your bad credit by giving you another type of account.
A Minor Factor: Inquiries
If you have a lot of hard credit inquiries, this can impact your score but not as bad as other factors. When you have bad credit, every point counts though, so try to keep them down to a minimum.
Luckily, inquiries only affect your score for a year although they will stay on your report for two years.
Tina’s Final Word
Getting a good credit score is not difficult, it is just something that takes discipline and time. If you have bad credit now, you will not have good credit tomorrow, but stick with it. In time, you will see that score inch higher and higher.