Bad Credit Loan Articles and Blog Posts

Bad credit scores can make it nearly impossible to get credit and loans, rent properties, get jobs, and more. If you do get approved for credit or loans, it can be quite hard to get good rates. And if you have a bad credit score and are in a lot of debt, you may find yourself struggling to get out. But what exactly is a bad credit score?
 
There are many credit scoring models, but the most commonly used is the FICO score.  FICO calculates your credit score based on a number of factors: your payment history, amounts owed, length of credit history, new credit, and types of credit used. With this method, your credit score ranges from 300 to 850, 300 being the worst possible score and 850 the best. Although there are no exact good or bad scores, in general, creditors will assume the following:
 
  • Great credit scores range from 760 - 850.
  • Good credit scores range from 680 - 760.
  • Fair credit scores range from 620 - 680.
  • Bad credit scores are anywhere below 620.
Your FICO score is calculated by the 3 major credit bureaus: Experian, Equifax, and TransUnion. Since each bureau calculates it’s own score, you may have 3 different scores all around the same range. Individual lenders and companies will use these scores to determine whether or not you are a financial risk. With a high credit score, you will easily be approved for credit cards and loans, able to rent properties, and you will receive low interest rates. But with a bad credit score, you may be rejected from credit cards, loans, or properties. And if you do get approved, you will have to pay a much higher interest rate. What qualifies as a bad credit score can be subjective, depending on the lender. However, the average consumer falls in the 680- 730 range, so anything below 680 can cause financial strains and troubles. 
 
If you are unsure of your score, the first thing to do is check it. You can access a free credit report from each of the 3 major credit bureaus every year from AnnualCreditReport.com. Check this to make sure where you stand. You should also examine your report to see if there are any errors or mistakes. Make sure that all 3 of your scores are in the same range, and call the credit bureaus with any questions you may have.
 
Once you find out your score, you can now work on improving it. If you are in a fair or poor range, don’t fret. There are things you can do to fix your score. Check out the blog below on easy tips to improve your credit score. And if you do have a higher score, it is important to continue working on your credit score. You can never have too high of a score, so keep consistent with your payments and good credit habits, and you’ll be able to reap some great benefits!
 
With bad credit, it can seem hard to ever change your credit score. But it is important not to give up on it! There are simple, everyday things you can do to get your score on the right track. And even once you start improving, it is important to constantly work on making your credit score better. Having a good credit score makes it possible to have a great financial future. Although it may take hard work and consistency over a lot of years, here are some simple tips to get you headed in the right direction:
 
  • Check your credit score. Many people don’t know their credit score, so it is important to find out where you stand so you can mark your progress. You can access a free credit report from each of the 3 major credit bureaus (Equifax, Experian, and TransUnion) each year from AnnualCreditReport.com. You will then know how bad your credit is and work on ways to improve it.
  • Make a budget. With bad credit, you may have a problem overspending or paying off your bills. The easiest way to fix this is to look at where your money is currently going, and make a plan to fix it. Decide what your necessities and extra expenditures are, and you can then make a realistic budget to follow.
  • Leave old accounts open. If you have bad credit, you may want to close old accounts that you have misused. However, your credit history plays a large role in your credit score. Lenders want to see that you’ve used credit for a long time, and cancelling a card will delete all that history from your report. So, keep those old accounts open even if you’ve misused them!
  • Make your payments on time. This is an incredibly important aspect of your credit, accounting for 35% of your credit score. By just making the minimum payments each month, you’ll be able to improve your credit. Plus, you won’t have to worry about extra fees for being late. If you have a hard time remembering, set up payment reminders or automatic transfers!
  • Pay off your balances. Although paying off your debt may be hard, it can help you feel much better while at the same time improving your score. The amount of credit you use is a factor in determining your credit score. And the smaller, the better. So, by having balances, you look like you are using more credit. If you just use a small amount of credit each month, your score will go up. 
  • Diversify your credit mix. If possible, think about getting a mix of revolving and installment credit. Lenders like to see both, so they know you are financially responsible in all aspects of your life. Take a look into small installment loans that you will be able to pay off, such as car loans or student loans. 
Your credit score doesn’t have to stay bad. By making simple changes, you can easily turn it around and start fixing your credit fast!
 
Are you constantly overspending? Do you always run out of money?
 
If so, you may have a problem with spending. Many people end up spending their entire paycheck once they get it just, because they have the money in the account. Others end up going over their credit limits and having to ask for money from family and friends. And although this may seem tempting, your money should not be spent immediately. Some should be saved for your future. Plus, if you are going over your limit and racking up debt, it’s very likely your credit score will drop. And by learning to spend wisely, you can easily improve your credit score. So, if you think you have a spending problem, change your spending habits and work on building a better financial future for yourself.
 
Here are some simple ways to stop overspending:
  • Write down everything you spend. By simply keeping a list of what you are buying, you will easily be able to pinpoint the cause of your overspending. Sure, you may go to the grocery store often, but do you really need to go to the mall 3 times a week?
  • Create a shopping list. If you get tempted by other things at the store, creating a shopping list is a very easy way to save. You can then stick to buying the things that you actually need.
  • Don’t buy big purchases immediately. Wait a little and think before buying a big purchase. Many people buy on impulse. And when it comes to those big items, like flat screen TVs and cars, it is extremely important to deliberate and decide if you actually need it before buying it.
  • Look at coupons and discounts before going to the store. Many retailers offer discounts to consumers. If you have a problem with spending too much, check out these offers. It may help you save a lot of money on your everyday necessities.
  • Think before taking out a bad credit loan. Bad credit loans may seem like a quick fix to financial woes. If you are taking one out just to spend more, it is a bad idea. These loans have exponentially high interest rates and short times before you have to pay them back. They are only meant to be used for emergencies, so do not even think about taking out a bad credit loan so you can spend more!
  • Instead of taking out a bad credit loan, think about using a prepaid debit card or a secured debit card. These will help make sure that you do not spend to your credit limit or overdraw your accounts. With a prepaid debit card, you can take the money directly out of your account. With a secured credit card, you first secure your credit line with a deposit and can then use the card as a normal credit card.
Overspending can cause a lot of financial damage. You can end up with bad credit and in a lot of debt. So, if you are constantly tempted to overspend, think about fixing your spending habits. By making this simple change, you can easily overcome bad credit!
 
Luckily, your credit doesn’t have to affect your child’s credit. But it is important for your child to learn the correct ways to manage their money at a young age, so they don’t make the same financial mistakes that you’ve made. By doing the following things, you can help your child to build credit:
 
  • Open a checking and savings account. These bank accounts will help your child learn how to manage money responsibly. If you are able to, help your child open these accounts. However, having bad credit may make it harder to get approved for an account. If you are unable to, educate your child on credit do’s and don’ts. Help them understand overdraft fees, late payments, and how to use credit. Make sure you Once your child turns 18, they can then open their own bank accounts. 
  • Have your child get a job. Your child will want to have a steady source of income, so they are able to pay off their credit card balances. Don’t let them get stuck in debt with you! So, encourage them to get a job and save money. They can then learn how to use their checking and savings accounts and pay off their bills.
  • Encourage them to create a budget. Determine what their income and expenses are. You can then help them create a plan to stay out of debt. By teaching them to not overspend and use credit cards safely, you can hopefully keep them out of the bad credit cycle! And if you are unable to help them, ask someone with good credit to advise them about their finances.
  • See if someone with good credit can co-sign on a loan. Although you may not be able to get the loans you want, having someone with good credit co-sign a loan can ensure that your child gets the money they need. Ask a close friend or family member if they are able to co-sign. If all payments are paid on time, your child will build his or her credit score fast.
  • Get a credit card. This one may be easier said than done. Once your child is 18, they can apply for credit cards on their own. With little or no credit needed to get approved, both secured credit cards and student credit cards are great options to build credit. However, if your child is younger than 18, you may not want to add them as an authorized user on your credit card because it will affect their score as well. But, like a loan, you can ask someone with good credit to add your child as an authorized user. Just make sure your child pays on time so it does not lower someone else’s score too!
Don’t let your child fall into a debt cycle too! Educate them, and they will be able to build a great financial foundation for themselves. Your bad credit will not affect your child as long as you take care to keep your credit separate from theirs!
 
 
Before rushing into a loan, it’s always important to do your research. And if you have bad credit, it can be hard to decide. Getting a bad credit loan is tempting, because you get approved for the money you need fast. But it is important to know what you are getting into ahead of time. By asking yourself the following questions, you can make sure that a bad credit loan is right for you:
 
Why do you need a bad credit loan?
If you are taking out this loan just because you have debt and want to buy more things, a bad credit loan may not be the best option for you. These loans are high interest with high fees and can result in a lot more debt if you do not use them correctly. Even if you just need to pay off your bills, you should probably stay away from a loan. Bad credit loans should only be used in the case of emergencies. They are small unsecured loans that are designed to be paid back within a very short period of time, so if it’s not an emergency situation, avoid a bad credit loan!
 
Will you be able to pay it back?
Check your finances and your credit score before taking out a bad credit loan. If you do not realistically think you can pay back the money by your next paycheck, you probably do not want to take out a loan. Many people find themselves in a debt cycle, because they take out a loan and are weighed down with high interest charges and fees. Keep in mind that bad credit loans are short term and you may have to pay it back within 2-3 weeks. So, if you don’t think you will have the funds to pay it back by then, don’t take out a payday loan. 
 
What are the terms and conditions of the loan?
It is incredibly important to find out the terms and conditions of the loan before getting one. Find out what your interest rate is, what the extra fees are, who to contact, and what happens if you default on the loan. Knowing this information beforehand can help you avoid any nasty surprises in the future. Try to pay it back on time, but understand what you are getting into if the worst case scenario happens.
 
Which loan should you get?
Not all bad credit loans are created equal. It’s easy to fall for the bad credit loan offers that give you quick approval for money you need. But don’t fall for any of them. Some online deals are scams, so it is incredibly important to be careful before you give away any information. Make sure the website is secure and all the terms and conditions are given clearly beforehand. 
 
Don’t just rush into a loan that may end up hurting you. Do your research, and decide whether or not a bad credit loan is right for you!
 
If you have bad credit, you may have thought about cancelling your credit card. Lots of people assume that cancelling a credit card will get rid of all the debt and late payment history associated with that card. However, this is far from the truth. Although you may no longer want to use that credit card, cancelling it can actually hurt your credit score. And if you have a bad score to begin with, you probably don’t want to make it worse.
 
How exactly does it hurt your score?
 
Cancelling your credit card can ding your credit score in a number of different ways. For one, your credit history is one of the factors used in determining your credit score. If you cancel an old credit card, this can delete a lot of history from your account. And the longer you have used credit, the better. So, even if you may have misused credit, deleting old history (even just 1 or 2 years) can have a negative impact on your credit score. 
 
Lenders also take into account your credit utilization. This is the amount of credit you use versus the amount of credit available to you. Having a low credit utilization results in a higher credit score. Lenders do not like consumers who consistently use credit close to their limit. So, when you cancel a credit card, you automatically increase your credit utilization. That credit card will no longer factor into the amount of credit you have, so it looks like your balances are much closer to your limits. This can result in a lower credit score. Even if you don’t use your credit cards often, just having $X amount of credit to your name gives you a higher credit limit and lower utilization.
 
In addition, many consumers assume that by getting rid of an old credit card, they can get rid of the debt and late payment history on that card. This is not true. If you have a late or missed payment, this will stay on your credit report for 7 years regardless of whether or not your credit card account is still open. Other debt problems may continue to show up as well. Cancelling a credit card does not delete that bad history; it may just get rid of the good parts of your history.
 
So what should you do about your old credit card?
 
The best thing to do is to keep your account open. Although you may not use the card often, you can leave it open to keep your account history long and credit utilization low. This will keep your bad credit score from dropping even lower. And you should work on improving your credit in the meantime. Pay your balance in full each month, and make good decisions when it comes to credit usage. If you continue using your credit card responsibly, your score will go up on its own without having to cancel any old credit cards.
 
You’re ready to say “I Do,” but you may be worried about your bad credit. Many people fear that getting married will affect their credit score. And if you have bad credit, you definitely don’t want your spouse to be stuck with it too. 
 
The good news is that you don’t have to worry. Although a common misconception is that credit scores merge after marriage, this is not true. The act of getting married does not change your credit score. Your credit score will be yours and your spouse’s will still be theirs. Your credit score is tied to your Social Security number, so it is yours and yours alone. You and your spouse will also maintain separate credit files at each of the 3 major credit reporting agencies. Even if one of you changes your last name, your credit reports do not merge. Instead, the new name will be listed along with the old name as an alias. So, as long as you each have your own credit cards and financial history, your spouse will not be affected by your score in any way. 
 
However, there are certain times when bad credit can affect the both of you. For example, when you apply for a joint loan or credit card together, both you and your spouse’s credit scores will be taken into account. Even if your spouse has a great credit score, you cannot choose which one they look at. Lenders will look at both credit scores to determine your interest rates and eligibility for that loan or credit card. This can be a problem for couples looking to get a home mortgage or car loan. If you or your spouse has bad credit, there is a chance you may not get approved for these loans. In addition, lenders may give you a higher interest rate based on your poor score. This can also be a problem for joint credit cards. Many newlyweds want to add themselves to their spouse’s accounts. Before you do this, you should think it through. With joint accounts and accounts on which one spouse is an authorized user, the history of the account is reported on both of your credit reports. So, if you have a bad score and you add your spouse as an authorized user, his or her credit score may drop as well.
 
So what should you do if you are trying to get a loan or bank account together?
 
The answer is simple. If you have a bad credit score, you will have to decide together how you want to handle credit-based applications. Some couples choose to apply independently. So, if your wife has a good credit score and you don’t, have your wife apply for the mortgage. You will then get approved and have much better interest rates. On the other hand, you may want to apply jointly and accept higher interest rates so as to improve your credit score. You can use your spouse’s good credit to make your credit better, even if that means your spouse’s report getting a little worse in the meantime. Others choose to wait and work on their credit scores, so they can apply jointly and get the best rate. Regardless of what you choose, it is important to keep improving your credit. Maintaining a good credit score will help you have a happy marriage!
 
Your credit score is one of the most important factors lenders use in determining whether you are eligible for a mortgage. So, having a bad score can be a dealbreaker. Even though you may be financially responsible, lenders will consider you at risk of defaulting on your loan and may deny your application. However, there are ways to improve your chances of getting approved. Although it may be tough, it is still possible to qualify for a mortgage if you have bad credit. Here are some easy steps you can take to improve your chances:
 
1. Check your credit report.
Although this may not seem beneficial, checking your credit report for any errors can make a strong difference on your credit score. All Americans are entitled to a free credit report each year from the three major credit bureaus: Experian, Equifax, and Transunion. And many times there are inaccuracies. Check your credit report thoroughly, and report any mistakes or inconsistencies to the credit card company. If there are mistakes, your score can go up. 
 
2. Demonstrate that you have a steady income.
Lenders want to know that you are financially responsible, so showing that you have a good job lets them know that you can cover your mortgage. It is incredibly important to be honest and show your lenders that you have a steady income. Even if you have a bad credit score, you can use social media and your job to your advantage and prove to them that you are financially responsible.
 
3. Pay off your outstanding debt. 
This is an easy way to improve your credit score. If you are able to, you should pay off all credit card balances and other loans before you try to get a mortgage. With no outstanding balance, your score will improve significantly and you will be better able to get a good deal on interest rates and are much more likely to get approved for your mortgage.
 
4. Look for a cosigner. 
If you need to, ask someone with good credit, such as a family member or good friend, to cosign your loan. By using someone with good credit, your bad credit will not keep you from getting the loan. They will be held responsible, and you can then qualify for the loan you need. However, if you default on your mortgage payments, your cosigner will be held responsible. So, it is very important to pay your mortgage on time. 
 
5. Explain the negative things in your report to the lenders.
In many cases, your credit score may be low due to a late payment made years ago or a major illness. Sometimes, simply explaining the circumstances of your low score can help you by letting the lenders know you have since learned to be financially responsible. If you do have a past foreclosure or bankruptcy, address it. Let the creditor know why this happened and what you are doing now to insure that it won’t happen again. 
 
There are ways to qualify for a mortgage with bad credit. However, the best thing you can do for your mortgage, and your future, is to work on rebuilding that credit score!
 
Love is in the air, and you want to do something amazing for that special someone. But your bank account may advise otherwise. According to last year’s Consumer Reports, the average American spent $130.97 on Valentine’s Day. If you don’t have this kind of money to spend, don’t fret. You can still have a romantic and unforgettable time spending less. Here are some easy ways to save this Valentine’s Day:
 

Dining

Going out to dinner on Valentine’s Day may seem routine, but it can be very costly. Many restaurants have a price fixed menu with 3 or 4 courses, and you can end up spending up to $100 a person. So, the best way to save is by eating in.
  • Use your credit card to your advantage. If you are spending money on groceries, use a card that offers cash back on money you spend at a grocery store. Some cards offer as much as 3% back on grocery purchases. And if you are eating out, pay for your meal with a card that offers cash back or points when you spend money at a restaurant. For example, the Discover it card currently gives cardholders 5% cash back on restaurant and movie purchases.
  • The cheapest and most romantic meals are homemade, and you can wow your significant other with your cooking. If you aren’t the best chef, stick to appetizers or something easy. Even just a cheese plate paired with some wine can be very thoughtful. When it comes to drinks, don’t worry if you can’t afford the most expensive wine or champagne. Buy some cheaper options, and serve it in a carafe. Your date won’t be able to tell the difference.
  • If you are worried about your meal seeming too ordinary, there are a lot of little details you can add to turn your home into a romantic scene. For example, sprinkle rose petals on the table or light candles and dim the lights.

Gifts

Valentine’s Day may not seem complete without flowers, chocolate, and gifts, but there’s no reason to bust your wallet to get these things.

  • Know that you don’t have to do it all. If it’s not in your budget, don’t get it. Your significant other will be happy knowing that you did something, even if it is just flowers and a handwritten card.
  • Once again, use your credit cards when buying gifts. Know your cash back and rewards programs, and use them to your advantage. You can end up with a lot of points by using a card that offers special rewards promotions.
  • Rather than buying chocolates or candy, bake something for your significant other. A batch of heart shaped cookies or brownies can be very touching and extremely inexpensive. And if you do want to buy chocolate or candy, research the best deals before buying.
There is no reason to get into debt over Valentine’s Day. By following these ideas, you can have a romantic Valentine’s Day while saving money and spending less.
 

With bad credit, it can be hard to get approved for loans. Lenders typically focus on your payment history, amounts owed, and how long you have been using credit when deciding your eligibility for a loan. If you have a bad credit score, you know how hard it can be to get approved for the things you need. You may get turned away from loans, denied from credit card applications, and your application to rent properties may be rejected. However, that may be changing.

Small lenders have started to use social media when determining a borrower’s eligibility for a loan. They will look at a potential borrower’s Facebook, Twitter, LinkedIn, and other social media profiles to gauge their trustworthiness. They will then use this information to insure that the potential borrower’s information is valid and that he or she is not a financial risk. Lenders have stated that they look at things such as a borrower’s education, career data, who they are friends with, how they interact with others, and how many followers they have. For example, if you claim to have a job, the lender will check your LinkedIn and Facebook to insure that you have the job and see how long you’ve had it. So you might want to stay away from making viral quitting videos or posting statuses about being fired. Lenders will also look to see if you have professional connections in your field and if you have a good online persona. This practice is currently used by startups that grant smaller loans to businesses and individuals who have no to bad credit. This gives them an opportunity to demonstrate their responsibility in other ways than just their credit score. Following in their footsteps, other lending companies and FICO have acknowledged that they too may start using social media to determine a borrower’s credit score.

So what does this mean for people with bad credit?

This could be a great thing for people with bad credit. In a lot of circumstances, a low credit score is due to debt or a mistake from years past. However, you automatically get denied from getting what you need because of that single number. With social media, you will no longer be judged by your FICO score alone. While you may have been denied or had high interest rates in the past due to bad credit, your online reputation can now help you get the credit you need. By acting professional and responsible online, lenders will think that you are financially responsible. They will give you the loan you need, because there is more to you than a bad credit score. If you are honest about your job and have legitimate connections with others, lenders may see you as a valuable asset, not a financial risk.

So, be careful what you post on social media and you can reap the rewards. Your Facebook, Twitter, LinkedIn and other profiles may help you turn your bad credit around.