Poor Credit Doesn't Mean You Can't Borrow Money: Here's How
Did you know that a no credit check loan can be the solution to your problems with bad credit? While you may think that a poor credit rating stops you from borrowing money, nothing is farther from the truth - you just have to employ some clever tips and tricks to make things work for you, even with bad credit.
Problems With Poor Credit
In the financial world, everyone is afraid of those two ominous words: poor credit. They can severely affect your life in all kinds of ways, so let's look at some of the problems you may experience when you have bad credit.
You are rejected for tenancies, business ventures, payment plans, etc.
Before agreeing to anything, everyone will take a look at your credit score to see how responsible you are with finances. So, it will come into play if you are trying to secure a tenancy, for example, if you want to pay for a sofa in instalments, if you want to start a business partnership with someone, etc. People will judge you and your projected financial behavior based on your past behavior, and if your score is poor, you will likely face rejection from all kinds of places.
You are rejected for loans and credit cards
The situation is no different when it comes to things like credit cards and loans. You will either be outright rejected from borrowing money or getting an overdraft, for example, or you will be offered very bad or limiting terms, like a higher interest rate, a lower loan amount, or a shorter repayment period.
Don't Be Scared Of High APR
The aspect that plagues individuals with bad credit is the very high interest rate that comes with bad credit loans. You've heard it before, no doubt - that bad credit loans are a rip-off, or they're not worth it, or they are a sure way to sinking yourself further into debt.
What I am going to propose, however, is a different approach to this issue: don't be scared of a high APR. While yes, a loan with high interest is far from being an ideal solution, here are ways in which you can make it work for you and convince yourself that a high APR isn't the end of the world.
1. Borrow a smaller amount of money
A lot of people are put off by high interest rates, because it means that you pay back a lot more money than you borrowed, so they're worried about being able to afford repayments. However, the effects of that can be offset by borrowing less money. That way, you will be able to afford the repayments easily and you don't have to kill yourself trying to pay off a large loan.
2. Pay off the loan under a year
Here's what you need to remember: the longer you take to pay off a loan, the more you will pay in interest charges. In order to avoid racking up that interest, you can try your hardest to pay the loan off as early as possible, instead of dragging it out. Sometimes, that is simply not doable, but do aim for paying it off under a year. If, however, it takes you longer to repay your debt, don't feel bad about it - statistics show that 2/3 of students will never pay off their student loans entirely, according to the Student Loans Company, so you're not alone.
How To Keep On Track With Payment
Is the thought of making repayments giving you a hard time? Have you had trouble with consistent repayments in the past? Here are some of the things you can do to keep on track with payments:
- Cut back on your expenses to save money for your loan instalments
- Mark your due dates in your calendar and set alarms
- Use an app that tracks your debt and payments
- Set up direct debits to make sure your loans get paid on time
Use No Credit Check Loans To Rebuild Credit Scores
One of the most clever ways to improve your credit rating that no one ever tells you about is actually taking out no credit check loans. Yes, paradoxically, going into debt can help you improve your financial situation and your chances to get approved for a loan in the future.
How to get a loan to improve your credit score
Since you're struggling with bad credit, you will probably already know that a lot of lending companies will deny you loans based on the credit check, or you will be offered very bad deals. You can, in fact, circumvent rejection by opting for no credit check loans. As the name says, a no credit check loan is a loan you get without going through the typical credit check. How is it possible to get a no credit check loan? The assessment is based on other checks, such as ID check and an affordability check where they might look into your employment situation, etc. That way, your credit does not interfere at all in your application and you are not judged based on it.
Why does getting a no credit check loan help build your credit rating?
Since your credit rating is a reflection of your financial behavior and responsibility, it is affected positively or negatively by every move you make. We all know that defaulting on loans, or making late payments drags our score down, but we tend to forget is that good, consistent financial behavior will improve our score. So, if you were to get no credit check loans and pay them off quickly, consistently, and responsibly, not only would you benefit from the money you borrowed, but you would also improve your score at the same time.
All in all, poor credit is not the end of the world, especially when you have the option of getting no credit check loans. Check out the top tips on getting a loan with no credit check and don't let your bad credit score stop you from taking control of your financial situation!