Personal Finance Blog For Women
A bad credit score can make a grown man weep. When we’re younger and first developing our credit, a late payment here and there may seem like no big deal, but as we get older we soon learn that a few black marks on our credit score can be a huge deal. If you need money for, well anything, you may find it difficult and quite possibly will be looking at loans for people with bad credit.
Where is the line drawn which determines ‘bad’ credit?
Credit scores determine one’s credit worthiness. A credit bureau analyzes people’s credit and determines who receives what scores. Scores can range from 300 to 850 with 725 being the average in the US. The line for acceptable credit worthiness by lenders is generally accepted at (drum roll please) 660. If your score is not this high or nowhere near this high, don’t panic. There are many options for bad credit personal loans or loans for people with bad credit.
Before you run out and get a bad credit personal loan realize that many factors come into play when calculating whether one’s credit is ‘good’ or ‘bad.’ Any sort of nonpayment or late payment to exist creditors will hurt your credit score. Another obvious factor is if you’ve filed bankruptcy within 7-10 years. However, all is not lost. Many lenders have loans for people with bad credit. They realize that sometimes it is necessary to take out bad credit personal loans.
What loans are available for someone with bad credit?
There’s no reason to dwell on the fact that your credit is sub-par. If you need a loan, do not be embarrassed if it happens to be a bad credit personal loan. This loan may actually revive your credit score. The two most popular options for people with bad credit are either secured or unsecured bad credit personal loans.
A quick Internet search will result in many websites that offer unsecured personal loans. An unsecured loan is one where a lender lets you borrow a set amount of money with no collateral. This is why it is called ‘unsecured.’ Each lender will have its set of criteria in order for one to apply for an unsecured loan, but owning a home is almost always not necessary. The biggest drawback from an unsecured personal loan for people with bad credit is the interest rate will be higher than with a secured loan.
In order to get a secured bad credit personal loan you will most likely need to own a home, car or anything that the lender consider collateral. These loans have a lower interest rate and are available for different amounts depending on the lender.
Regardless of which bad credit personal loan you decide on, the goal is to rebuild your credit. Loans for people with bad credit are not the ends of the world, but you don’t want to be forced to rely on them time and time again.
