The incident of getting a bad credit loan on your credit score is just simply frustrating for any borrower. The modern financial life now is completely interrelated with loans. You cannot do a single transaction without the help of loans. It is very hard to find any single individual who uses cash money for any kind of transaction. That is why, people cannot even think about the phenomenon of living a life without any access to loans. The bad credit score on someone’s credit report can create this problem. Let’s get to know a wide idea about what is credit score and how someone can may face the consequence of a bad credit score.
What is a credit score?
A credit score is a mathematically symbolic score that resembles the way a borrower deals with his or her financial obligations. In the past, the money lenders had to face a lot of problem to understand and determine the ideal borrowers, to whom they should provide loan. The money lenders are here to business. They lend their own money as an investment. So, when they lend money they need the confirmation that they are going to get their money back. As they could not determine that who the ideal borrowers to provide loans too are, it was easy for people to fake them with wrong papers and make default in the loan repayments after obtaining the loans. That is why; earlier in the 1980’s the system of credit score was invented some financial expert. The idea was very much useful for the lenders and that is why it became very much popular around the globe in few days.
The credit score is a simple mathematical algorithm that is determined based on three factors. First, the number of loans you have, the way you repay your loans, the way you repay your other financial obligations like utility bills, medical payments etc. normally the credit score is determined on a scale of 1-1200. The number can vary from country to country. In USA, the credit score is determined on a scale of 1-1000. People who have a credit score that is lower than 600 are called as bad credit score owner and people who have a credit score higher than 800 are called as good credit score owner.
How good credit score owners are treated from the money lenders:
People who have a good credit score are taken as ideal borrowers to provide loans to. When a good credit score owner goes for borrowing a loan towards the loan lenders, then he or she gets a very good welcome. All the lenders are interested to provide loans to them. No lender would every say no to a good credit score owner. People, who have a good credit score and a good flow of income, are considered as secured borrowers towards the lenders. They feel their money would be safe, if it goes in a hand which already has a good reputation of being good credit score owner and also it has enough money to not to have any problem to repay the installments. So, the money lenders provide them the loans without any complain. At the same time, the good credit score owners are the winners of easy rules and conditions for loans.
The good credit score owners win every negotiation. The lenders are always ready to pay heed to them. That is why; they can win the easiest rules and conditions when they look for a loan.
How bad credit score owners are treated from the money lenders:
On the other hand, the scenario is completely different with the bad credit score owners. The bad credit score owners face the plethora of problems when they go for looking for a loan. No money lender is ready to provide loans to them. The money lenders always want a secured and reliable persons to hand their precious money. The lenders cannot take any chance by handing their money to someone who already has a bad reputation of not fulfilling their financial obligations properly. That is why; they do not feel safe to provide loans towards the people who have a bad credit score. That is why, the people who have a bad credit score are always denied when they apply for any loan.
It is not that the bad credit score owners always be denied on their loan application. Not all money lenders slam the doors on their face. Some even become ready to provide the loans towards the bad credit score owners as well. Though, they get ready to provide the loans with a high rate of interest and also with too much strict rules and conditions on repayment of the loan. Such a high rate of interest and strict rules and conditions for obtaining loans do not really ease the life of the borrower with the monetary solutions they needed, rather it gets more jeopardized. So, for people who have a bad credit score owners, it becomes almost impossible to get access to any kind of loans. If they need to have access, they will have to search a lot. At the same time, the answers to their search would be very expensive, costing them a huge amount of money to get rid of present financial problems.
That is why; getting a bad credit score is a huge problem for the regular borrowers. It is not only a huge problem; one can even say that it is actually a nightmare. So, when someone indulges into a bad credit score, they want nothing more than getting rid of that bad credit score. Getting rid of bad credit score is a long term method. It is not too much tough, if you know how to do it and if you know some simple tips. Let’s get to know about some simple tips for you to get rid of bad credit score.
Some useful tips to get rid of bad credit score:
Getting rid of bad credit score is a long term method, but it is not that much tough at all. If you make a default to repay the loans, you will see that your credit score is going down within a blink. On the other hand pulling it up may take more than one year, and that year would seem longer than just one year as you would face a huge financial challenges. Still, you need to wait and also give a very good effort to see the end of it. As, you need to follow some methods to pull up your credit score. Some of these methods are given below:
Consolidate your loans:
When you are into the problems of bad credit score, you need to think about the reasons for which your credit scores are going down. As you already know that the multiple numbers of loans you have can become the reason to pull your credit score down, you need to work on that. You need to put your efforts to decrease the number of loans you have. Before to decrease the number of loans, you had to repay the whole number of loans you have. Now, you do not need to take such a giant step. You can just consolidate your loans and you will be able to decrease the number of loans you have. It is because the loan consolidation is a process through which you can consolidate your multiple numbers of loans into just one. The consolidation loan is actually a new big loan that would cover all your previous loans. People sometimes refuses to believe that when they are already in a problem of getting into a bad credit score by making loans, there a new loan can help them to pull it up. Yes, it can do so, if you know which loan to take up for doing this pull up job for you. So, in order to get an easy upwards push for your credit score, you can consolidate all your loans into one loan and possess one loan only rather having a multiple number of loans.
Check your credit report for errors:
The credit scores are determined based on the credit reports and updates made by the lenders. All you financial activities are recorded and reported by the lenders towards the credit record company. The workers of credit report companies review your financial activities and records sent by the money lenders and other institution where you have your financial obligations. Based on the review, the credit reporters determine a credit score.
To err is human. So, sometimes the lenders make errors in your reports, sometimes the credit reporters make error in the reviews and thus they can end up making a faulty report that shows you to have a low credit score. It can also happen that the credit reporters have not entered some of your financial activity by mistake and thus your credit score is not getting the desired upward push it should have.
That is why, it is suggested to all the borrowers that if you face the same problem of getting a low credit score on your credit report. The first thing you should do is apply for reviewing your credit report. When you get your credit report in your hand, you must check the report carefully that if there is any activity missing on the credit report or if there has been any mistaken report mentioned on the credit report. If you find any mistake, it is recommended that you immediately report it towards the proper authority to remove the mistake. If there is any mistake, and you can remove it immediately, then your credit score can get an immediate boost.
Take up a bad credit loan:
You can also pull your credit score upwards by just taking a bad credit loan. Once again you might get shocked that why it is being suggested to you to get another loan, where you are already in so many problems for getting loans. It is because by taking up a bad cruet loan, you will be able to show some proper loan activities. The reason for why the bad credit scores remain on the credit reports of bad credit score owners for a long time is that they cannot show any loan activity after they have the bad credit score on their credit report. If there is no loan activity on the records, then the credit reports take a long time to have a better score. On the other hand, the credit report owner becomes able to add new activities where he or she is making the financial obligations properly with proper rules and management, then it is going to be reported towards the credit reporters soon and thus the credit report of the bad credit report owner is going to get a quick upward push.
The bad credit loans are called as the great blessing for bad credit owners for such reasons. First of all, these loans are provided for people who do not get loan from any other loan lender. These loans are provided in such a time, when every other third party financial resources have slammed their doors on the face of bad credit borrowers. In such times, getting a loan support without paying illogically high interest rate and strict loan conditions is like a blessing towards the bad credit borrowers. On the other hand, these loans do not only provides financial support towards the bad credit borrowers, they also give the scope for the bad credit borrowers to work on their credit score and improving it. To maintain the problems of financial life and to improve the bad credit scores, the bad credit loans are the wisest choice.