Should I Try to Repair My Credit or Get a Bad Credit Loan?
Even though there are many methods of initiating credit repair, some people prefer to rely on bad credit loans. But now the following question is warranted: what should one do first, repair his credit, or blow past it and get a bad credit loan? All implications considered, if you are in such a situation, you should definitely try to use credit repair first.
Why Use Credit Repair Instead of Getting a Bad Credit Loan?
Bad credit loans are remarkably helpful, that is true. In particular, because you can get a bad credit loan quicker than you can repair your credit (though not necessarily). But if you have a low credit score in the first place, a bad credit loan can further damage it when used carelessly. Let’s suppose you will either default on this loan or you will miss a couple of monthly repayments.
You know better than anybody else what happens in this case: your credit score will drop, and your misdemeanour will be branded in your record. Those are the last things you want when your credit is already far from idyllic. Credit repair should be the first thing on your mind. Once your credit score recovers, you will be able to get other loans with even better terms.
How Do I Know That I Have Bad Credit?
One of the clearest signs is when your credit card application has been denied. You will receive a notice that will clearly state the reason for the rejection, and there is a big chance that your credit score will be among them. That’s when you should consider credit repair.
Another sign of bad credit is when you start receiving phone calls from debt collectors who are trying to convince you to pay your debts. Moreover, if you have been turned down by landlords and cannot find a place to rent, you may blame it on bad credit too, since no one wants to take any risks with people who might not afford to make monthly payments.
Why Are Bad Credit Loans Not Recommended?
- They Have High-Interest Rates
First of all, bad credit loans are usually granted by individual lenders, not by banks. While this may seem like a great deal, it is not. Bad credit loans come with extremely high-interest rates (because you are not that good with money, they see you as a very risky client and are not willing to take any chances).
Lenders make tons of money off of people that choose to go with bad credit loans instead of repairing their credit. What’s more, some of them might, in fact, give people these loans well-aware of the fact that they will not be able to stick with them due to the interest rates.
- They Affect More Than Your Financial Situation
Most institutions and companies will judge you based on your credit score, and this can really affect your quality of life since many doors might close for you.
Your future loans are not the only ones that might be affected by your bad credit, but your job hunt and your mobile phone contract too. Yes, employers and teleco companies check your credit score. And this is not all; insurance companies might charge you a higher premium if you have bad credit.
How to Repair Your Bad Credit
If you have ever defaulted or missed payments and your score dropped accordingly, credit repair is the solution at hand. There is a multitude of methods of doing it. Some of them will provide a quicker solution, while others a more ridiculous one, but anyway – it is a necessity. You will not be able to get bad credit loans for the rest of your life. Sooner or later, you will have to repair your credit score, whether you like it or not.
Firstly, it would be best if you would not get another loan. Start paying for the ones you already have. Living on a budget for a while and prioritising your expenses will make a big difference when it comes to fixing your financial situation.
If things seem to have gotten out of control, you should seek the help of an expert. This can be of great help and will help you get back on track. Also, talk to your lender and explain the situation you are in and he/she may offer some solutions.
If you want to find out more about repairing your credit (i.e. methods), call us on 1300 123 328 for some free advice and consultation. You will find valuable information as well as professional advice. Moreover, you will see how and why repairing your credit is your priority.
Getting a bad credit loan is simply cutting your last safety net. But of course, the choice is yours. You can go with any of the two if it makes sense and it does not get you in more trouble than you already are. Do your research and pick your choice carefully, so you don’t regret it afterwards.