When you find yourself in a position of bad credit, your options to take out a loan are considerably small. Not many lenders are willing to take on someone with a poor credit history as you are considered a risk. Of course, this can lead to you spiralling further and further into debt with no way out. People get into financial difficulties for a number of reasons, but it’s important to know there is always help available. Financial help for people with bad credit is easier to come by than you might think. Read on to find solutions.
What Is Bad Credit?
Bad credit simply refers to the fact you have a low credit score. There are a number of different factors that contribute to this score, which can affect your chances of taking out a loan. Those with a low credit score lend themselves to paying higher interest, due to the risk the lender takes on in the process. Below are some of the things that lead to a low credit score.
Missing repayments
Whether you missed your repayment by accident or didn’t have the funds, this will contribute as a mark against your name on your credit score. Even been late to make your repayments is enough to contribute. In order to avoid this, set up a monthly debit, or make note of when payments are due so you can meet them all on time.
Credit enquiries
Many people don’t know this, but even applying for credit or loans can affect your credit score. If these are all done in a short space of time, it suggests you are having trouble taking out a loan, which in turn lowers your credit score. It’s best to space these out over time, or if you are genuinely shopping for the best price for a loan, do it in the space of a few weeks to avoid the black mark.
Payment defaults
If you have a debt that is more than $150 and is overdue by more than 60 days, then this is considered a default. This will remain on your file for up to five years, even once the default has been paid off. This is one of the reasons there is a need for financial help for people with bad credit.
High credit card utilisation ratio
Just because you have the credit available to you, doesn’t mean you should use it. If you max out your cards, it reflects poorly on your credit score. It suggests you are borrowing beyond your means.
There are also a number of other factors that make up a bad credit score. The best thing to do is request a copy of your credit report, so you can see any negative listings that have been made. If any of these are incorrect, you can appeal to have them removed from your report altogether. But what financial help is there for people with bad credit?
Financial Help for People with Bad Credit
When you find yourself in a position of bad credit, it can often be harder to get back on your feet. Many traditional lenders aren’t willing to take a risk on you, so you can find yourself sinking further and further into debt. Thankfully, there are a number of ways to get financial help for people with bad credit:
- Debt Consolidation: it can often help financially to take out a loan to pay off all your current loans. This gives you the advantage of having all your debts in the one, easy to pay back the loan, so you can manage the repayments and stay on top of it. You also have the ability to negotiate a lower interest rate in the process.
- Speak to your lender: if you are struggling to pay off current debts, then it can’t hurt to speak to your lender. They may be willing to renegotiate the terms of your agreement to make it easier for you to mee the repayments and find yourself debt-free.
- Bad credit loan: there are lenders, including Bad Credit Loans Australia that will let you take out a bad credit loan. This is simply a loan given to someone with a bad credit history. They often come with a slightly higher interest rate in order to offset the risk involved on the lender’s behalf.
Bad Credit Loans: Financial Help for People with Bad Credit
If you are looking to get on back with your credit, then it is worth considering taking out a loan with Bad Credit Loans Australia. No matter what your credit history, we are here to provide solutions. With competitive rates and flexible terms, we tailer our loan products to support you. Take the opportunity to improve your financial situation today with our help.
