It is upsetting when bad credit strikes again, denying you another loan. With that feared low credit history, it feels like you’ll never get approved, no matter how careful you are today.
But don’t give up yet! This blog entry outlines five potential techniques to improve your chances of finally being approved for the loan you need.
From getting a co-signer to looking into alternative lenders, you might find some light at the end of the darkness. Keep reading for advice on how to transform a no into a yes.
What is a Bad Credit History
A bad credit history is a track record of failing to make timely payments on credit accounts such as loans and credit cards. This negative information is documented in an individual’s credit reports, maintained by the three major credit bureaus in the Philippines: Credit Information Bureau, Inc. (CIBI), CRIF Philippines, and TransUnion Philippines.
Late payments, collections accounts, bankruptcies, foreclosures, and other negative indicators indicate reckless credit management. Missed payments, defaulted accounts, and maxed-out cards lead to a negative credit history and low ratings.
Lenders use credit reports to assess risk, so having a terrible history makes you appear riskier to lend to. This can result in loan denials or unfavorable terms.
5 Ways to Get a Loan with a Bad Credit History
A bad credit history might make it incredibly difficult for you to get approved for a loan. Despite having an awful one, there are still some choices for borrowing money. Here are five tips that could help you get approved:
1. Get a Co-Signer
One of the most effective ways to get loan approval if you have a poor score is to apply with a cosigner. A co-signer is someone with strong credit (often a relative or close friend) who agrees to share responsibility for loan repayment.
Thus, having a co-signer with excellent credit might considerably improve your chances of approval.
2. Look for Credit Unions or Smaller Community Banks
Larger national banks often have stricter loan criteria. Smaller community banks and credit unions may offer better odds because they are more flexible and make loan decisions locally.
Likewise, as a credit union member, you may have an easier time qualifying.
3. Provide Proof of Income
When you have a poor rating, lenders want to know if you can truly repay the loan. Providing proof of stable employment and income, along with documents like pay stubs and tax returns, can improve your chances of approval.
4. Consider a Secured Loan
In a secured loan, you use an asset as collateral to “secure” the loan. Savings accounts, automobile titles, and property are common sources of collateral.
Putting up collateral reduces the risk for lenders, so if you apply for a secured loan, you may have a better chance of being granted.
5. Improve Your Credit First
While it takes effort, increasing the score you have before applying can make a significant impact. Pay all bills on time, reduce debt levels, correct any inaccuracies on your financial record, and become an authorized user on another person’s credit card.
Hence, as your rating improves, your chances of loan approval increase.
Poor credit is undoubtedly a barrier, but these tactics may assist pave the road to acceptance. If you have a poor score, be prepared to pay higher interest rates. However, securing a loan and repaying it responsibly is one of the most effective strategies to gradually improve your standing.
Improve Your Credit with Vidalia Lending Corp.!
If you’re concerned that your low credit history will prohibit you from getting approved for the loan you need, Vidalia Lending Corp. may be the solution. We recognize that past financial issues can have a big impact on your financial standing, so we evaluate applications with a more personalized approach.
Our lending professionals consider more than just a record when making loan decisions, including your current income, job stability, and ability to repay. With different lending alternatives and flexible conditions, we could be your second chance to acquire financing despite previous financial concerns.
Apply today and one of our loan officers will assist you through the process, including which of the strategies discussed in this blog may help you get accepted.
