The credit score is a factor getting more attention in recent times. Your credit score massively impacts your ability to secure loans with most commercial banks. Much of the population is unaware of the status of their credit score and the role it plays.
Most individuals tend to realise the status of their credit score when they apply for loans. Banks reject loan applications when the individual has a low credit score. Some companies provide bad credit motorcycle loans for customers.
How to avail of personal loans when you have a bad credit score?
Although most commercial banks refrain from providing personal loans to individuals with a low credit score, this is an alternative. Multiple new-age fintech platforms offer individuals personal loans despite having a low or bad credit score. They tend to charge a high-interest rate as opposed to commercial banks.
How to pick the right lender?
It is always advisable to research the lender and verify their credibility. Many scammers in the market collect all personal data and then vanish.
These scammers lure individuals by offering them terms and conditions that seem very enticing. They tend to collect a fee before disbursing your loan amount. However, they disappear with your money and do not provide you with the amount as discussed.
Another aspect of paying attention to is the interest rate. Interest rates are shown either in terms of months or years. Always make it a point to calculate the interest rate monthly. Compare this with all lenders you have considered and local banks before making a calculated decision. Interest calculated over a more extended period leads to an important distinction.
Multiple lenders and fintech companies provide genuine services for individuals with a low credit score. These companies offer a bad credit motorcycle loan and other personal loans for individuals at nominal interest rates. They are trusted sources.
Read Also: How to Fix a Bad Credit Score
Ways to Improve your score
There are multiple easy methods by which you can improve your credit score to benefit you in the long run. This will ensure that your future loan applications do not get rejected and let you avail yourself of personal loans at lesser interest rates.
- Try to clear outstanding credit card bills at the earliest. Every time you pay your credit card bills, aim to clear them off in full rather than settling to clear only the minimum amount.
- Refrain from using your credit card until the existing bill is cleared. Once you have removed the account, make sure that you only spend the amount you can pay back every month in total.
- If you currently do not own a credit card, opt to get a secured credit card. You can do this by opening a fixed deposit with the bank. Get a credit card with a limit of 80% of the deposit amount, and make sure to spend only 30-40% of the credit limit. Pay your bills in full on time, which will boost your credit score.
- Do not cancel your credit cards. This reduces your overall available credit, which will negatively impact your score. If you have multiple credit cards from the same bank, it is advisable to transfer the credit limits to a single card.
- Refrain from applying for loans repeatedly. Constant rejections tend to affect your credit scores, and they take a hit.
A bad credit score is only a hiccup in your journey. There are multiple ways by which you can fix it. Meanwhile, there are various options to avail personal loans while improving your credit score.