You need to get a loan for something, but you don’t have the credit history that it is going to take to get the loan. No worries, there are still ways that you can get the money that you need to make that big purchase. However, there are going to be some steps that you are going to have to take to make sure that you can get that loan, and don’t be surprised when there are extra payments, or other hurdles that you have to overcome in order to get that loan.
If you have bad credit, you should expect to pay more in interest. This is because you have no leverage in negotiating a loan. They say that beggars can’t be choosers, and this rings true when it comes to getting a loan. Since the credit issuer realizes that you have bad credit, they will bank on your desperation for any loan, and the fact that they will want more incentive to give out money to a borrower that has a risk of not paying the loan back.
Make sure that you have documentation of your recent credit history, and your job status. If you went through a period of time in your life where perhaps you didn’t have a lot of money, or you didn’t do well paying bills, you might want to show that your circumstances have changed. If you had bills that totaled 2,000 a month on a 1,500 a month salary, but now you make double or triple that, you should show that you have the means to pay.
If you have bad credit, you should be prepared to lower your expectations as to how much you are going to be loaned. Bad credit is a risk, and that means the issuer of the credit is going to only loan you what they feel you are going to be able to pay back, or whatever they are willing to risk. If you are going to buy a car, and you wanted a 20,000 car, you might want to save up some money, because you might only get a loan for 10,000 with poor credit.
Sometimes it is better to wait until the economy is good to submit an application for a loan. When the economy is down, the credit market is going to be restrictive. When the economy is good, lenders are willing to make exceptions because they feel like they can withstand the losses, and they might be able to make money if the borrower pays the money back.
There are ways to get credit if you have a poor credit history. Things like getting a new job, paying bills on time for a certain amount of time before applying for new credit, and other ways you show you are paying your other bills are going to be paramount to you getting new lines of credit if your credit is poor. It is possible, but you are going to have to work harder to get that credit.