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04 Dec
2017

Tracey

administrator
 

In the 21st century, being able to get a loan is one of the most important things for both your private life and your entrepreneurial attempts. Unfortunately, with a bad credit rating or no credit rating at all, this can be incredibly difficult to achieve. While these two situations aren’t equally as bad, both of them are undesirable for those who need a loan. With this in mind, here are a few simple ideas that might benefit you greatly if you ever find yourself in this kind of a situation.

No credit score or bad credit score, which one is worse?

Before we even start, it is vital that we get one thing out of the way – having no credit score is not the same thing as having a bad credit score. In fact, as many as 45 million Americans currently have no credit score whatsoever. The most common reason why this happens is because they simply don’t have enough credit activity in order to make out a meaningful score. As you might have guessed, this is also something that commonly happens to people who are new to the country or those that are too young.

Keep in mind, however, that while you may not have a credit score, you still have a financial history and, if there are no problems here, you will be on much better ground than if you had no credit file whatsoever.

Both good and bad accounts have an expiration date

The next thing you need to keep in mind is that no credit score lasts forever. Sure, some may argue that a bad credit report might mend itself in 7 years’ time, but this can happen to a good account as well. Nonetheless, it would take about 10 years of inactivity for this to happen, but to some people, this posed a serious problem they weren’t prepared for. The key to maintaining a good credit file is to keep using credit. Unfortunately, this also means that it might take you a while to generate a positive score.

Fixing a credit score

The thing about fixing your credit score is not that it’s complicated, but that it’s a race against time. People who are in desperate need of a new loan usually don’t have the luxury of time to build up their trust with the banking system to an acceptable level. Still, there are a couple of methods that could give you immediate positive results. Setting up payment reminders, reducing the amount of debt owed (at least temporarily) and regularly checking your credit report are some of the methods that just might work.

Alternative methods

For those who are in a bit of a rush or don’t need a huge loan, there are some alternatives they could turn to. For instance, some companies specialize in bad credit loans, which are approved even to those with a bad credit history. Due to the fact that these loans usually go between $500 and $10,000, lenders usually don’t require any kind of collateral as a guarantee. Finally, seeing as how the amount borrowed is fairly modest, the repayment time is most commonly somewhere between 6 and 18 months.

At the end of the day, not having a good credit file score to begin with puts you in an awkward, but in no way desperate position. There are numerous methods for you to rely upon as a temporary solution and much more you can do in the long-run. Before you are able to do any of this, however, it is best to first get familiar with all the options you have in front of you.

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