Your credit score is everything these days. If you have poor credit, you can’t even get a phone plan, let alone the money you need for a major purchase like a car or a home.
But none of us plans to have poor credit. Life just happens. You get sick or you lose your job, and you’re running up your credit cards or falling behind on your bills.
Fortunately, you can repair your credit just the same as you ruined it. You won’t be able to do it as quickly, but if you are consistent, you can see steady gains that can help you qualify for the credit you need soon enough.
If you have some unexpected financial needs before your credit is repaired, here are a few options you can consider:
Not all personal loans require a credit check. Some loans can be given in small amounts up to $1,250 without any credit check and with minimum eligibility requirements, such as a certain income amount. You can get a small loan without worrying about taking a hit to your credit, and you can pay off that unexpected repair to your car, drain the septic, or take care of another financial emergency. Check here for more info on loans like these which are available to apply for online.
Payday loans are not a great option for getting the money you need, but they are available as an emergency measure. These loans provide an advance on your paycheck, but they do so at an astronomical interest rate, making it very hard to repay them. Only take out a payday loan if you have absolutely no other alternative since taking out these loans can cause you more financial trouble.
You can always take valuable items to your local pawn shop as collateral for your loan. Instead of selling these items, you turn them over to the pawn shop to keep as collateral while you pay off your loan. Interest rates are better than payday loans but not usually better than personal loans. Plus, you have to be without your valuables while you are paying off the loan. Who wants to be without a TV for weeks or months?
Fixing Your Credit Score
The best way to make sure you have plenty of options to get the cash you need is to repair your credit score. You’ll become eligible for more lines of credit, and you’ll be able to get better interest rates, helping you to save money.
To start repairing your credit score, pay off any delinquencies you have as soon as possible. Those delinquencies will continue to mar your credit report as long as they remain. They don’t just ding your score when they first appear; they keep causing damage as long as they remain. Make it your first order of business to pay off these delinquencies before you do anything else with your credit.
Next, make sure you are paying all bills that are reported to the credit agencies on time. That can include your car payment, mortgage, phone payment, cable, and insurance. Even if you are a couple of days late on a payment, it can be reported as 30 days late since the payment is not credited until the next billing cycle.
While you are paying your bills on time, you can start working on paying down your debt. Put a little extra toward your credit card bill each month. Or transfer the balance to a card with a lower interest rate. When you have a high balance on a credit card or other account compared to your overall limit, that brings down your credit score. Do whatever you can to bring down the balances compared to the limits and you’ll see your score start to improve.
Finally, keep your credit inquiries to a minimum. Don’t apply for any new lines of credit unless it is absolutely necessary. Every time you apply for credit, it shows up on your credit report and brings down your score a bit. That’s another reason why applying for a personal loan that doesn’t require a credit check is a good idea when you have poor credit.
It may take a while to improve your credit, but if you are consistent, you can make gradual progress that will lead to huge gains. Follow these tips to bring up your score, and check out the loan options listed above if you need money before you reach your goal.