With the faltering economy still on the minds of many Australians and credit reports still riddled with poor circumstances, many are having a hard time finding loans and financing. It’s a catch 22; you can’t get a loan with bad credit, but you can’t establish good credit if you can’t get a loan. If you have a less-than-stellar credit rating, there are things that you can do immediately to boost your ability to get a loan and financing. Use these four tips and tricks to get the money you need.
Use online lending sources
Not only are you more likely to obtain a loan from a non-traditional lender like a third party lending site, but you can also help to build back your credit rating. There are many peer lending sites that allow you to borrow money from others in the market instead of an institution. They are willing to assume the risk involved but will charge a higher interest rate. The benefit is that once you pay off the loan on time, you can use that as proof the next time you need money. Your risk will be much lower the second time around.
Get a cash-backed credit card
There are many credit cards that are prepaid or cash-backed. Many ask why you would want a credit card if you have the cash to pay. The simple answer is that it is a great way to build a credit history. By using the card and not carrying a revolving balance, you are increasing your favorable credit usage. Make sure to use it for small purchases, increasing-over-time, and to pay it off immediately and in totality.
Credit unions are not technically banks, but they work very similarly to them. Credit unions are normally based on a group of people who have some association to one another. They work through non-profit organizations to provide people with the money they need and are more likely to take on riskier consumers. With so many different credit union associations to choose from, you can probably shop around to find the best deal.
Home equity loans are ideal because you don’t actually have to use them to gain benefit from them. They are loans that are based on the equity of your home. Your home’s equity becomes the collateral that the lending institution bases their loan and financing on. If you have even a little equity in your home, home loans can increase your overall credit rating pretty quickly.
Having bad credit can make things much more difficult and expensive, but there are ways to overcome your past. Taking the steps to build your credit profile will ensure that when you do need a loan you will be able to obtain one.Read More