Having bad credit can sometimes feel like being followed around by a black cloud. Or like having a disease that means no one wants to come near you. Bad credit is a mark on your record that indicates you have struggled to pay off loans in the past. In turn, this suggests that you are someone who may not pay off future loans. Or that you have missed other arranged payments. In the eyes of a creditor, that makes you less desirable for lenders to offer money to. Missing a payment or falling behind on a car or mortgage loan shouldn’t mean you will get denied for an online loan. There are things you can do to improve your credit score and better your chances of getting a payday or installment loan.
The unfortunate irony is that the very people who have bad credit are also very likely the ones who need the occasional loan. These consumers don’t have a bank account and it’s really tough to get a loan with no credit. So what can you do?
Work to remove negative items from a credit report
Some types of online loan are easier to get than others if you have poor credit. If you have a bad credit record and you approach your bank to ask for a personal loan of $1,000,000 to buy a yacht, you will likely be turned down.
A payday loan is more likely to be accepted among the lending choces. In this case the money you’re asking for is only short-term (often a couple of weeks) and much smaller. The APR is so high on these loans (in the hundreds) that the risk is very small for the lender. Unfortunately though, payday loans won’t help you to rebuild your credit score. The reason for this is that payday loans are paid off all in one lump. This means that there’s no history of repayments to help you restore your good name.
If you can find installment loans online, these have the potential to help you rebuild your score. Title loans are like payday loans with the difference being that you are paying them off in many installment payments. This then means you can build up that history of repayments which will amend your credit score. Lucky for your, there are many companies that fund direct lender loans online. We have a comparison tool that lets you decide what is going to work best for your credit situation.
What to Expect
Like payday loans, installment loans online will usually accept a wider range of people. These acceptance rates are due to higher APRs (around 50%) and shorter repayment terms. But because you pay in many installments, they are still useful for repairing a bad credit rating. The problem though is that the APR on your direct loan might be increased to show the greater risk that you represent. The simple solution to this problem though, is to shop around and look for the best rates. While you might represent a little risk when it comes to payoff terms. Remember is that these companies want your business and thus you can still represent an opportunity.
How to Increase Your Credit Score
There are other things you can do to increase your credit score in the meantime too. These include, taking out credit card advance loans and then being sure to make your repayments in a timely manner. Try to pay off any debts that you can afford to pay off and then make sure to keep your main bank accounts in credit. Go after high interest amounts from payday loans and any bank or mortgage cash outs.
You can use various free tools online to check whether these changes are having a positive impact on your credit score. There are also credit improvement tools provided by the Us Government as well. Many of these free resources are very effective for people that need to get fast money. Another tip is to try and make sure that your credit score is not linked with anyone else’s that may be bringing yours down. Failing all this it’s important to have another plan to get cash. Find a direct lender and make sure to repay your loan obligations on time. You should find this is enough to gradually restore your credit history. Eventually you can get you out of a money crunch in the short term.