What is a Bad Credit Score?
Credit history is among the most important factors when it comes to lending. Your credit history depends on a number of factors. Some of them include amount borrowed and timeliness payments made among others. Although we have different credit scores, our major concern in this discussion is a bad credit score. You will have bad credit score, those between the 300 – 620 range, if you fail to make timely payments or default completely to service your loan. Getting another loan with a bad credit is not easy. In addition, you need to know that there is a difference between bad credit and not having credit history. Lack of credit history simply means that you have not taken any loan for the past seven years or more years. This is easier to overcome than a bad credit score. Although there are lending institutions that can offer you a loan with a bad score, most of them have very high interest rates.
Exactly How Long Does Bad Credit Information Stay on Your Credit Report?
The question of how long bad credit information will feature on your credit report may haunt you for long if you don’t have the right information. The time it stays on your heels depends on the type of loan/bill you paid late and how late it was. Here is a list of cases that may taint your credit report.
- Lawsuits and judgments
- Collection items
- Delinquent accounts
- Overdue child support
If a parent fails to support his child after being offered a chance to contest, the late payments make him stand at a risk of being reported for seven years.
A report on a delinquent account may take your whole seven years, even if you pay off since the account may continue to show that it was previously delinquent.
Collection items can be reported for seven years and 180 days, even after paying up in full.
Seven years is the maximum number of years bad credit can remain on your credit report from the date you pay a judgment, or a lawsuit is filed against you.
When you file for bankruptcy, bad credit can only remain for a maximum of ten years. If your case is dismissed, then the ten years count from the dismissal date.
Bad credit mostly remains on your report for seven years, but most adverse credit reports abate a little after twenty-four months.
What Should I Do If I Have A Bad Credit Score and Need A Loan?
When it comes to borrowing certain amount of money, most individuals with bad credit usually lose hope, especially these days where financial institutions are less willing to lend such people. Bad credit ratings can be caused by many factors – for instance, many people lose their jobs, resulting in monthly debt payments. Even those people who still have a stable job are sometimes not able to maintain their monthly payments because of increased need to tighten-up their budget. As a result, this will affect their credit rating scores greatly. However, there is no need to lose hope or despair, there is always a way to get a loan with bad credit when you need one. Here are a few.
Determine Where You Stand
Before getting a loan with your bad credit from an online lender, it’s important to know where you really stand. Visit any of the free credit score websites and get your credit report and score copy. If find your score to be less than 580, chances are that you are likely to find it difficult to get a loan with bad credit. However, no matter how low your score is, go through your credit report to determine whether there’re any inaccuracies. This will be a good starting point to apply for a personal loan with a trusted and reliable online lender.
Search Online For Lenders
Use the information on your credit report to carefully screen the online companies you deal with to those ones who are willing to work with individuals with same credit score as yours. Always be sure to ask for just what you really need and be willing and ready to explain any difficulties or inconsistencies in your credit report like collection event or bankruptcy.
Payday Loans/Cash Advance
If a payday loan seems like your only remaining chance to get a loan with bad credit, and you actually believe that your situation is just temporary emergency, then it’s probably better than obtaining no loan completely. However, cash advance in most cases come at extra-ordinary high-interest rates and this means that can easily roll over and get the borrower in serious financial difficulties.
Briefly, if you consider getting a loan with bad credit through an online lender, it’s important to choose the most trusted, reliable lender. A considerable interest rate, reliability, and ease of loan application are some of the things to consider when choosing the best service provider to lend you money online. There are so many reputable sites where you can apply for your personal loan with bad credit.
What Is A Good Credit Score?
Everybody wants to have a good credit score. The score will be determined as “good”, depending on the lender, who will use a unique scoring system. This implies that your credit score will range from one lender to another. So what is a good credit score? Basically, a good score is that which is above 700 or 720, in some special cases.
How A Good Credit Score Is Determined
Good credit scores are determined or calculated, in relation to specific factors. Here are some of the things that will be looked at:
• Reviewing of the previous credit profiles of different consumers.
• The examination of the credit profiles, in order to find out the common variables.
• Developing arithmetical models that are based on the credit variables, which will predict the future performance.
• Assigning of relevant weights to every variable to determine their performance or how they will affect the credit.
The overall result from each consideration is what will determine the credit score.