Tips on Getting Loans With a Bad Credit

Getting your loans approved can be incredibly difficult if you have a bad credit history. Ratings agencies are usually very strict when it comes to defaults. Just a few defaults are enough to land you in the bad books and this is going to significantly impair your financial future especially when it comes to accessing credit. Bad credit loans are designed to give you a lifeline if you are in a position where you are unable to access credit because of your bad credit past, especially in cases where you need to access some personal loans for debt consolidation.

bad credit loans

People with bad credits may not even be able to afford car thanks to the prohibitive interest rates. If you are finding yourself in this situation, there are plenty of ways in which you can increase your chances of getting approved for these loans. Here are some simple tips on how you can give yourself the best chances for approval for bad credit loans:

Applying with a lender that does not use credit scoring

Most Australian lenders use a computer-based credit scoring system whenever they assess your loan applications. So if you are in the bad books with credit rating agencies, virtually every lender is going to access your credit history and they are going to deny you a loan based on that. The best option for you is applying with a lender that does not (solely) rely on the computer scoring system and where you can get an opportunity for your application to be reviewed by a real person who can carry out an evaluation of your past and present financial circumstances.

Demonstrate that you have rebuilt your financial health or situation

If you faced credit problems in the past, you need to demonstrate that you are now back on track. For example, ensure that you are meeting all your current financial obligations promptly. You should do this not just with your loans but also with your credit card and utilities. If there is evidence that you are saving money regularly, this is also going to strengthen your application for loans even if you have bad credit.

Seek professional advice

If you are out of ideas or unsure on how to proceed with your application for bad credit loans or debt consolidation loans, it is advisable to seek professional advice on your credit report from professional debt agencies such as Debt Mediators. There are lots of specialist companies that can assist you in cleaning up your credit report.

Look for specialist lenders

There are some mainstream lenders that may offer you bad credit debt consolidation loans but this will depend on the severity of your credit problem. While the interest rates may be higher, you can only stay in these programs long enough for your credit situation to improve. With debt consolidation, insolvency agreements or debt agreements, you are very likely to get lower interest rates from the lenders.

Use a broker instead of applying amongst various lenders

Every time you apply to a lender, they will lookup your credit report. If there are too many lender requests recorded on your credit report, this is also going to negatively impact your credit profile. So it is best to review the terms of various lenders via comparison or broker websites before you make an application. Your best bet is, however, using debt mediation or advisory services who can offer you professional evaluation and application services.

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