According to credit repair companies in Dallas, if you’re in over your head in debt, you might be tempted to get out with a bad credit loan. It’s vital that you know and keep track of your credit score so you can make adjustments should you need to build it up. For now, let’s take a look at credit and bad credit loans.
Bad Credit Defined:
In today’s world, it’s not difficult to get into debt through poor credit habits. Many people haven’t been properly educated in fiscal responsibility and the buy now, pay later attitude sold to us by banks and stores doesn’t help.
If you want to get a loan with a reasonable interest rate, experts say your FICO score should be 680 or higher. And the lower your score goes, the higher the interest rates and the worse payback terms you’ll get should you ever need to borrow.
What Is A Bad Credit Loan?
When you find yourself buried in debt, it’s easy to get a loan to give you a little breathing room. However, some predatory lenders look for people in these desperate situations offering help with a bad credit loan. These loans typically have high interest rates and are designed to benefit the lender, not you.
If you find yourself getting one of these upside down loans, remember to make sure every payment is on time and to pay the loan off as quickly as possible. And whatever you do, don’t use the loan to go into more debt. The idea is to rebuild your credit with these loans, not bury yourself further.
Types of Loans: Secured & Unsecured:
If you’re looking to get a bad credit loan, two types are available: Secured and Unsecured. The secured loan means you have to put up something as collateral, such as a car or your home, whereas an unsecured loan doesn’t have this restriction. These loans typically have risky repayment terms and high interest rates.
A favorite way to get a quick secured loan is through one of the many payday loans or payday advance places that have popped up everywhere. You can also opt for a Title Loan, which uses your vehicle title or property as collateral.
An unsecured bad credit loan is your best bet because they usually have slightly more favorable terms and look better on your credit report.
Fixing Your Credit:
If you have bad credit you’ll want to fix that as soon as possible, and the good news is that it’s not that hard to do; you have to be responsible and diligent, but it can be done.
- Make your payments on time
- Pay down debt as quickly as possible
- Correct any mistakes on your credit report
- Wait it out
Lastly, remember that a bad credit score isn’t forever; even bankruptcies and foreclosures go away after about seven to ten years. Keep being responsible with your money and making timely payments, and you’ll start rebuilding your credit score in no time.