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.
If you spend more than you earn on a regular... Read More
As the term implies, Personal loans are simply loans for... Read More
No matter what your credit history is the simple fact... Read More
Comparing payday loan companies online saves you time and money.... Read More
Payday loans offer a fast and easy solution to financial... Read More
We have all heard the stories about cash advance lenders... Read More
Have you ever felt like you bought an auto and... Read More
A UK Home Owner Loan Can Unlock Your Capital To... Read More
Secured loans have become very popular over recent years, with... Read More
If you're in the process of trying to find home... Read More
Do you need fast cash to get your car fixed... Read More
Big financial goals, no security to supply - it is... Read More
In a time when everything seems expensive, it might seem... Read More
Are you paying out too much every month for your... Read More
The bad news about attending college is that it costs... Read More
Should you find yourself overcome by debt, you might want... Read More
So you are engaged. Congratulations. It was not easy. What?... Read More
Whether you have good credit, bad credit or no credit,... Read More
Buying A New Car: A new car is second only... Read More
Owning a home is the most important dream of any... Read More
Studying at college can be an expensive business and you... Read More
A buyer of a new home may find himself or... Read More
Poor credit doesn't have to stop you from getting a... Read More
If you're shopping around for a cheap debt consolidation loan,... Read More
If you're in a crunch for money, either because of... Read More
If you want to apply for a loan online, you... Read More
Before entering college, you may find yourself pondering exactly how... Read More
Title loans have the same features as a secured loan,... Read More
"Money is like a sixth sense without which you cannot... Read More
Sometimes it might seem as though finding good loans UK... Read More
Listed below are some of the reasons for choosing a... Read More
Predatory lenders promise loans that are "too good to be... Read More
You wouldn't consider buying a new pair of shoes, a... Read More
Sometimes it might seem as though finding good loans UK... Read More
You always dreamt of walking down the aisle in style.... Read More
Like most of the contingencies (the after effects of unemployment... Read More
When trying to locate bad credit loans, many people find... Read More
The most important and difficult part in farm mortgage shopping... Read More
If your home business is starting to overflow from the... Read More
How do you build a marketing strategy that can have... Read More
It's possible to receive up to 500 dollars cash overnight... Read More
When borrowing money it is usually because we lack the... Read More
If you have bad credit, have an emergency and need... Read More
As tuition rates at many colleges continues to rise, the... Read More
There can be more to a bank business loan than... Read More
If you spend more than you earn on a regular... Read More
Personal loans can be divided into two categories: secured personal... Read More
Unemployment is generally supplemented with several other vices like poverty... Read More
Need funds to startup or expand your business? Follow these... Read More
In order to understand qualifications for loan approval, let's examine... Read More
Refinancing your car loan online is now more convenient. Your... Read More
Most Internet users are now extremely comfortable using the Internet... Read More
Bankruptcy has a stigma attached to it that is hard... Read More
Outlined below are some of the reasons for choosing a... Read More
You wouldn't consider buying a new pair of shoes, a... Read More
Listed below are some of the many reasons why you... Read More
You are trying to buy a new property and selling... Read More
If you're in the process of trying to find a... Read More
A secured loan is a loan agreement in which the... Read More
Car loans are a tempting way to purchase a new... Read More
Title loans have the same features as a secured loan,... Read More
If you need cash now there are several options available... Read More
There is more than one type of loan. Depending upon... Read More
Credit Unions have long been known as the place to... Read More
So you have never taken out a loan? You don't... Read More
Listed below is a guide to loan terms. It is... Read More
Loan |