If you have a bad credit score and are worried about the high interest rates. Then not to worry, with these 3 easy steps to improve your credit score, you will be able to get the loan you need without the high interest rates.
Your credit score is the main factor that affects whether you get a loan or not. There are some companies that are willing to give you a loan even if you have a bad credit score, but you should remember that the interest rates will be higher in comparison. The interest rates are high because the lender will be taking a risk by lending money to those who already have problems paying back the loan. Even if you have a valid reason why you were unable to pay on time, the lender will not be considerate as he or she are more interested in what they are getting out of lending you the money. However, with the economic recession paying your loan back with a high interest is impossible. The following 3 steps will guide you on how to improve your credit history or score, so that you can easily get loans at a lower interest rate.
Step 1: To Save
In order to repair your credit score, you should keep in mind that will take time and a little effort from your side. The best way is to open a savings account, where you should deposit money regularly. The money that you deposit needs to be a considerable amount, to show that you have a steady income. The savings account will allow you to prove to your lender that you are willing to put money in your account and improve your credit score.
Step 2: Get a Credit Card
Once you have enough money in your account that you opened in step 1, you will need to get yourself a credit card. There are many different types of credit cards available in the market; however secured credit cards will allow you to borrow the money you have in the account, rather than borrowing it from your bank. Due to this benefit, you can get yourself a credit card very easily, as the issuer will not be concerned with your financial background or situation. After using this credit card, you can apply for a regular one, in case it is required. If you do get a credit card, make sure that you use it wisely, so that you can easily payback the monthly payment that is required to by you. Paying on time will show a positive effect on your credit score.
Step 3: Apply For Loans
If you use your credit card sensibly, then you can apply for a small personal loan. Be sure to apply for a small amount, as it will be easily approved by your lender. Once you get your loan, make sure you pay the monthly payments on time, so that your credit score improves further. Once you have started to improve your credit score, you can start applying for loans that have a lower interest rate.
With a good credit score, you can refinance or apply for an equity loans for your home. It is a good idea that you try and pay the monthly payments before the deadline, to prove to your lender that you are not a risk to them.
By following the above 3 steps, you can easily reach the credit score that you have set for yourself and get the financial help that you require now and then.
Article Tags: Credit Score, Credit Card