Mike Torres asked:




If you have a bad credit history then there are some actions you can take to recover from a poor credit rating. At this point, I don’t recommend a payday loan or any sort of unsecured loan. Although it’s likely you will be rejected for most anyway, the last thing you want to do is get into more debt. People with bad credit need to plan for the long term and not just the short term.

Pay Bills On Time

The first step to fixing poor credit history is to always pay your bills on time from now on. This will show that you are reliable and can meet commitments. This will get you on track to a good credit rating.

Stop Using Credit Cards

Credit cards are the largest source of bad credit ratings. You must take immediate action and stop using your credit cards. Tear them up, freeze them or give them to a loved one. Anything that stops you from making those impulse purchases. And you should definitely NOT be paying your bills with a credit card!

Credit debt consolidation is one way to cancel your credit cards as the balance is put into a loan instead.

Take a Second Job

Although its hard work, you simply need to be earning more if you want to fix your credit particularly if you have large monthly loan repayments to adhere to. The extra income will help you to catch up on bills and of course contribute a small amount to a savings account for future or emergency use.

Get a Small Loan

This might sound like crazy advice to give to someone with bad credit, however if you have a family member co sign with you on a very small personal loan (say $2000) and you make repayments on time, this will without doubt fix your credit rating alot. You will lose money in the short term but long term you will be better off.

Christopher

Sam Renstaff asked:




If you’ve suffered from financial difficulties in the past, this may have affected your credit rating. A scenario that you don’t want to find yourself in is having a low credit score and needing a loan. You may well believe that it’s now pretty much impossible for you to obtain any sort of finance.

This isn’t strictly true as many lenders are now aware of the fact that the majority of people are struggling financially. The economic decline of the last few years hasn’t helped and we seem to have less money in our pockets and more bills to pay than ever before. This has made lenders more willing to offer low credit score loans.

The best choice if you have adverse, bad or poor credit is a secured loan. Lenders will feel they are taking an unnecessary risk by lending money to someone with a poor credit history. Therefore if you are able to offer some form of collateral to secure a loan your chances will improve significantly. For a secured loan you would normally need to offer your home, a savings policy or a share portfolio as security. Should you default on your repayments, you risk the chance of losing your collateral.

The majority of people who have adverse credit are well aware of this fact and rather than risk losing their home, would rather find an unsecured or personal loan. This type of loan will usually be for borrowing of a lower amount and require no form of security. Due to this fact the interest rates are higher than that of a secured loan. However if you have a low credit rating as well, this could push the rate up even further.

There are many lenders who will happily give you a low credit score loan that requires no collateral, but you need to be fully aware of what you’re getting into. Always check and make sure you understand the terms of any loan before signing an agreement. If it just doesn’t seem right, then walk away! Your loan will cost more than if you had a good credit rating, but it should still be reasonable and affordable!

Florence

Normand V asked:


I just want to know what my score is without having to pay for it. I want to apply for a small personal loan of $3,500.00 and I hear each time you apply it lowers your score. I am in the process of re-building my credit and don’t want to apply if my credit rating is a “C” or below can anybody help me?

Roland

East Coast asked:


This would be a Personal loan to be used for debt consolidation of high rate credit cards

Bryan