So you have never taken out a loan? You don't have a credit card and you don't have a mortgage? You always pay cash? You're a student, a recent widow, a divorcee or from an ethnic minority group who have a tendency not to have any lines of credit? If you are any of the above then your credit score will not necessarily reflect your ability to pay as you have little or no credit history whatsoever. This will make it difficult to obtain any form of loan and in these circumstances you may have to take out a bad credit loan.
How prevalent is this?
Fair Isaac estimate that 50 million consumers do not have enough credit information on file to generate a credit score. This means that they are being turned away by lenders for things such as a personal loan.
Why does this happen?
Lenders will conduct a credit check. As there is little or no historic data available to measure the risk in loaning the individual money they will not meet their credit score criteria. More and more often, such consumers have to take out a bad credit loan to finance any large ticket purchases like cars as their credit score limits their financing options.
Is this fair?
It seems ludicrous that this is the case, but you have to look at it from the perspective of the lender. If someone walks into your bank or applies online to a lender for a loan, and their credit score is so low or does not exist, the automatic decision you would make is to reject the client. They appear to be too much of a risk.
Establish your credit history
The only way to remedy this is to start establishing a credit history. There are many specialist lenders who offer bad credit loans and bad credit car loans. They accept clients with little or no credit history far more readily. The bad credit loan will have higher interest rates than a standard consumer loan, but if clients make sure they pay on time and in full this will improve their credit score dramatically. They should just make sure that the lender does file credit reports, as not all of them do! In time, a credit score will be established and they can move on to apply for loans with much more favourable interest rates.
Peter Siu is a successful freelance writer providing valuable advice for consumers when applying online for credit cards, student credit cards as well as other personal & mortgage loans. You can visit his sites at http://www.uscreditcenter.net and http://www.ukcreditcentre.com - His numerous articles offer moneysaving tips on a number of topics.
Payday loan qualifications are different from other types of short-term... Read More
Financing the purchase of a used vehicle can be done... Read More
Should you find yourself overcome by debt, you might want... Read More
Under the microscope loans for military really are different from... Read More
If you're looking for an online loan, you might be... Read More
Looking for low interest debt consolidation loans can sometimes seem... Read More
People sometimes wonder about common types of loans, especially with... Read More
Some say that the automobile industry saved the economy during... Read More
Not everyone is aware of what is a student loan?... Read More
Finding cheap loans isn't always easy? it seems like every... Read More
No Credit Check Payday Cash Advance Loan - Benefits to... Read More
If you're in a crunch for money, either because of... Read More
Living in the United Kingdom, you might find yourself in... Read More
If you are in need of extra cash until pay... Read More
In order to understand qualifications for loan approval, let's examine... Read More
With a stated objective to help consumers, Congress deemed it... Read More
A Payday loan is a small, short-term, high-rate loan. It... Read More
Outlined here are some of the many benefits of a... Read More
Here is a useful guide to personal secured loans. A... Read More
Whether your payday arrives every Friday or every other Friday,... Read More
Somebody once said, 'Business is not financial science; it's about... Read More
A secured personal loan is the generic term for a... Read More
Cars ? they are your passion, necessity, luxury, earning member.... Read More
If you find yourself in a situation where you need... Read More
The secured loan is favoured by many UK residents seeking... Read More
A second mortgage is a loan that is secured by... Read More
A UK Home Owner Loan Can Unlock Your Capital To... Read More
So you have never taken out a loan? You don't... Read More
Have you noticed that everyone seems to have a newer... Read More
Short term payday loans are now available online. After filling... Read More
When looking for loans for bad credit, many people find... Read More
A Commercial Lender is Not a Commercial Lender When it... Read More
Parents should begin saving money early for their children's college... Read More
The Internet has provided a whole new dimension to obtaining... Read More
According to federal government research, small businesses provide about 75%... Read More
Secured Personal Loans are those loans against which you don't... Read More
Payday loan qualifications are different from other types of short-term... Read More
Financing the purchase of a used vehicle can be done... Read More
There can be more to a bank business loan than... Read More
You've got your eye on that shiny new Lexus -... Read More
A car loans after a bankruptcy is one way to... Read More
At some point in your working life, you may find... Read More
Interest rates have been at their lowest levels in over... Read More
A home equity loan is essentially a type of second... Read More
Financial fraud and identity fraud are one of the fasted... Read More
Not everyone is aware of what is a student loan?... Read More
It is still a few weeks to Christmas and every... Read More
Since the invention of the first self propelled car by... Read More
The usual modus operandi in most automobile purchases is as... Read More
If you've been thinking of getting a secured homeowner loan,... Read More
Personal loans are offered by lenders such as banks and... Read More
You just finished high school and realize you have two... Read More
Should you be in the market for a homeowner loan,... Read More
Credit relationships in a social system form an intricate web... Read More
Okay, so one day you wake up and realize that... Read More
Poor credit and a financial emergency don't seem to mix... Read More
The revolution that has affected everyone's financing technique is online... Read More
Regardless of your trading style; day trading, swing trading, or... Read More
Outlined here are some of the many benefits of a... Read More
A Bad Credit loan is a personal loan for people... Read More
A payday advance is a loan obtained to cover unexpected... Read More
Are their rewards of being your own boss? Yes, in... Read More
If you have bad credit and you are trying to... Read More
If you're getting in over your head with credit, you... Read More
Refinancing your loan is one of the best kept secrets... Read More
For American students, the U.S. Government came up with a... Read More
Loan |