Bad Credit Loans
Bad credit loans are available for people who have had issues with their credit score in the past. A credit score tells service and loan providers about your ability to meet your payment obligations. If you’ve ever had a mortgage, credit card, electricity, gas or phone account with a provider, they all require you to pay on a regular basis.
Sometimes these payments are missed, and often a letter is sent to you reminding you of the payment required. Should you not pay by the time the reminder is due, the provider may report your non-payment to a credit reporting agency. That missed payment will be on your record for the next five to seven years. This means your overall credit score will be affected negatively.
Options for Bad Credit Loans
Although it seems as if getting a loan with a bad credit score is difficult it is not impossible. Apart from applying to banking and non-banking loan providers there are some options out there for you. If you are currently receiving government benefits then the Centrelink loans page has more options available.
- No Interest Loan Scheme (community): Small personal loans with no interest rates and no fees, to help with any emergency living requirement;
- StepUp (non-profit): Small, short-term loans with low interest rates, no fees, and can used to help with any qualifying expense for your home or car;
- AddsUp (non-profit): This option will match dollar-for-dollar, every dollar you save over $300, up to $500, should you already have successfully repaid any of the above options;
- Non-credit-scoring Lenders: These lenders evaluate your application without referring to your credit history.
A good way to go about getting a loan when in bad credit is prove you have changed. Try and demonstrate that your financial situation is improving, by showing your financial commitments are being met. Even evidence that you’re saving money regularly is great way to show potential loan providers that you will meet your obligations from now on. Finally, a credit repair agency may help you to clean up your credit report. They will investigate options to have some entries against your report to be removed.