Money loans with bad credit – Do you need money loans but have bad credit?

Bad credit sounds pretty decisive and irrefutable when, in fact, it is mostly a transitory and fixable situation. Just to familiarize yourself with bad credit and what you can do about it, it’s imperative to first understand how it got flagged as bad.

It usually starts with your score. The agencies use a mathematical rule to check the information in your report against data from millions of other returns. This “magic” number has proven to be a very good estimator of how your behavior will be in the future. Your score may vary somewhat from agency to agency due to the diversity of information reported and measured to them.

Your score is significantly affected by your payment history, that is, how timely you’ve made your credit card, mortgage, car, and other loan payments. The amount of your current credit limit is also considered, along with the total debt you owe against that limit. Credit cards that are “out of stock” will obviously negatively affect your score.

Scores generally fall between 300 and 850, with the higher score representing better credit risk. It is interesting to note that most borrowers fall almost exactly in the middle. Finding your score is a good first step for a lender who needs to assess the behavior of a potential borrower. However, it is not the only factor that influences that lender’s decision. The extent of your history and information about your actual credit activity also play a role.

In the past, prior to the implementation of scoring, lenders would often see a negative factor on a report and reject the loan without looking further. Today, customers with imperfect accounts, even those who are 90 days or more behind on their mortgage payments, can access credit. As a result of their ability to better predict borrower behavior, lenders now offer a variety of credit products geared toward consumers with varying degrees of risk. Variables include the interest rate and the length of the loan.

If your history has been affected by late or missed payments, bankruptcy, or referral of an account to a collection agency, there are steps you can take to start rebuilding your credit. Keep in mind that it will take some time to get the job done, but it can be done.

Get copies of your report from trusted agencies. Realize precisely what you owe and to whom. Check your report for errors and if you discover discrepancies, contact the agency as soon as possible and ask them to investigate. (They are required to do so by law.)

Subsequently, contact your creditors and establish a precise strategy to pay the arrears. It’s healthier to arrange small, consistent payments than to skip payments because you can’t afford them. Start paying off your debt as much as you can. A free, nonprofit counseling agency can help you negotiate with your creditors and can often make arrangements that you as an individual cannot. In the meantime, stop using credit! Do not apply for new credit cards, as such requests may interfere with the counseling agency’s strategy and may further damage your report.

Bottom line, it may not be as easy as you’d like, but at least you have a good starting point for repairing your credit before you get your loan.

Good luck!