Having bad credit seriously impacts your chances of getting loans from banks or other loan providers. Now if you face an emergency and have to pay a medical bill or your overdue house rent you won’t be able to get a loan normally and you could find yourself in a really big problem, but not while Achieve Finance is her. At Achieve Finance, it doesn’t matter if you have bad credit, you can still get that loan. So, if you require funds immediately, you can get cash now even with bad credit.
Let’s discuss what bad credit is and why it doesn’t let you get loans from banks and other financial institutions. And not only your ability to acquire loans other businesses judge your candidacy on the basis of credit score too; from getting a job to getting a place to live all are directly affected by your credit score. Here are some terms you need to be familiar with in order to understand this concept fully:
Credit History: This is a record of your past payments of bills and other liabilities. It records all the payments that you have made and whether you made those payments within the due time or did you make late payments. It records all the payments you have not made and the amount of debt you have on you currently.
Credit Report: This is a summary of your credit history gathered from different sources; this will help give a clearer outlook of your credit situation and whether you make your pending payments responsibly or not.
Credit score: The data in your credit report and other information about you, such as your bank statements, the property you own and your family information are then used in a special mathematical algorithm to deduce your credit score. Also known as your FICO score, 35% of your credit score is made up of your payment history, 30% is derived from the total amount you owe currently, 15% depends on the length of your credit history, the older it is the better and the remaining 20% is based on the mix of your credit types and new credit, which stands for the recent loan applications you have made. Your credit score has a range of 300 to 850; while scores above 700 mean good credit and above 800 are excellent, score lower than 580 represents bad credit. Approximately 62% of Americans have a FICO score of lower than 579, this means that they are not able to easily get their loans approved.
So how did you get bad credit? Well, the answer is clear, the history of your payments and acquired loans tell that it is not safe for the lender to loan you the money. Having bad credit generally means that you have failed in the past to make timely payments as described on your credit agreements as you haven’t paid your credit, bills other liabilities on time, or haven’t made any payments at all. As the credit report also takes into account other public records such as tax records, your citizenship and legal judgments against you; not having a good legal record and failing to show responsibility in making timely payments will render you ineligible for any bank loans.
Other reasons behind a bad credit score are declaring bankruptcy, only paying the minimum amount each time and getting your identity stolen. Declaring bankruptcy is a legal process whereby a person or entity declares that they have no way of paying their debts and they seek relief from their debts, this happens if the lender eases the interest rates or provides relief by some other means. Having declared bankruptcy in the past seriously damages your credit report. Choosing to pay the lowest amount possible every time you make an installment to pay back a loan also lower your credit score, paying less means that you will be repaying a debt for a longer time and will have to pay greater interest, this damages the credit report. If you are on time to make all payments and manage your finances responsibly, you can get bad credit if someone uses your credit card to make huge purchases and run up huge bills that you are unable to pay.
These are all the ways in which your credit rating can be negatively impacted and by preventing these you will be able to have better credit. Improve your credit score by paying your bills on time, decreasing your debt burden by paying off loans, not maxing out your credit card and keeping a track of your credit score free online.
Let’s discuss why banks or other creditors don’t want to lend to someone with bad credit; someone with bad credit is a straight-up risk for lenders and very low credit scores are too much of a risk that these creditors are willing to take. Other people may have applied for loans alongside you and if you have a lower credit score than other applicants, there is no reason why a creditor will choose to loan out to you (a higher risk option) and not to the person who has a better credit score (a representative of the fact that they are better at paying back loans).
After reading this you may have realized the importance of having a good credit score. Whether you expect to take a loan or not, a good credit score is a requirement in every other aspect of everyday finances. But if for some reason you still have a bad credit score and you have no chance of getting a loan when you need it the most, don’t fret because Achieve Finance has got your back. It doesn’t matter how low your credit score is or how much debt you are already under when you apply for a short-term loan you get it and you get it fast. Apply now and receive your funds in your bank account in as little as one business day.