A bad credit score makes it very difficult for anyone to take loans. If you are not doing the regular payment for the first loan, your score will be below 470. Firms do not give loans to people with such a low score. The average score for marinating is above 470. Lenders feel very risky before giving credits to such people because of their history of not paying the money back on time. Maintaining a good score opens up manylike getting a premium version of credit cards, loans for large amounts, and many others. This is why it is recommended to have a good enough score to get more loans in the future. But there are still some chances to get a personal loan with bad credit after improving some things.
Reasons behind the low score:
- You have not done the regular payments for the money taken
- You have taken loans in the past also but was not able to pay back them in the given certain period
- The bills of credit cards taken from the bank do not pay back timely
Everything about credit card scores:
It is always said that a score above 470 is the average score, and in this score, a person is eligible to get loans in the future. People with scores below 470 are referred to as the low credit card score holder, and these are those who either delayed the payment or have not paid back the money which has been borrowed. Some people maintain their credit score above 800, which is an excellent score for getting approved for any loan or any credit card in very little time. Very few people are found with such good scores.
Tips to get a loan with bad credit:
It is still possible to get a personal loan with bad credit; many firms and lenders are there in the market which do not ask for a credit score. All they need is a guarantor. A guarantor is a person who has taken a loan before and knows you. One should keep in mind before choosing a guarantor like a person must have a credit score of at least more than 470 at least and must be 21 years above. There are also other ways to prove in front of lenders that you will be able to pay back the money by providing them with documents of your salary slip and showing that your salary has been increased. If nothing works for you, then provide the lender with some collateral. Everyone wants to be in the risk-free zone and so do lenders want. Giving you collateral makes it easy for the lenders to approve cv the loan as they have something in the backup for recovering the money back if, in any case, the person is not able to pay back their money.
Who gives loans to Bad credit score holders?
Most big banks do not give loans to low scorers as they fear again not getting back the money that is being credited. But worry not, because two financial institutions provide loans and credit cards even to those who have a very bad score or cannot keep any collateral as they do not have anything. But there are some advantages as well disadvantages like if you are getting a loan from such institutes, you need to pay a very high rate of loan interest in comparison to normal interest rate and also you can get approved for only smaller amounts because they also do not want to take the risk. So they provide loans but in a smaller amount.
The institute which provides loans to such persona ar either the non-banking companies which deal in the financing g and some online websites like P2P. This site generally approves loans up to the amount of five lakhs.
Even if you are getting the loan, make sure to do the payment on time, and the best way to do this is that make your account cut the loan amount directly. This will help in payment on time even if you forget it.