Bad credit can be a major hurdle when you’re looking for a loan in an emergency, but the right advice can help you tackle this obstacle with confidence. Give yourself a leg up the next time you need a loan with bad credit by reading the tips below.
Know Your Credit Score
Bad credit is a broad category, running the gamut of rock-bottom scores to almost but not quite prime credit.
Although these two ratings are both technically subprime, what they mean for your loan varies drastically. They impact the rates you may qualify for in different ways, so it’s important you know your exact number.
Finding out your score is easy. Everyone in the United States gets three free checks from different providers.
You’ll want to take advantage of this free check before you apply because of these two reasons:
- It gives you a good idea of the kinds of lenders and loans you may qualify for.
- You have a chance to check for any errors in your file that may be bringing your score down unfairly.
Compare Your Loan Options
A low credit score will typically mean you qualify for a smaller amount of money at a higher interest rate. But the exact loan amount and rate depends on your lender. Researching lenders and their loans can help you find the best possible rates for your score.
Cast your net wide to include any cash advance, payday loan, line of credit, or installment loan for bad credit available today. You may also want to research what online direct lenders like MoneyKey can do for you.
For most of the states, direct lending options remove the need for any third-party at any stage of an installment loan or line of credit. With just one company involved with your loan from start to finish, communication over rates and terms is clear and concise.
Budget for Timely Payments
Paying your bills on time is always a good idea. It keeps your account in good standing and prevents late penalties and extra interest from dog-piling onto your principal.
By following your payment plan promptly, your loan will cost you exactly as much as outlined in your contract. Check this document to see your lender’s stance on pre-payments. If they encourage you to make extra or early payments, look to your budget to see how you can make this happen.
Extra payments come with two major benefits:
- You’ll pay off your loan faster.
- You may reduce how much interest you accrue overall.
Work on Building Better Credit History
If you’re struggling to find rates and terms you like, take a break from your search to see how you can improve your credit. Increasing your score may unlock more affordable options from a bigger pool of online direct lenders.
Unfortunately, there’s no magical way to reform bad credit overnight; it’s a slow process that involves committing to positive credit habits over time. If you need to tackle these unexpected emergency expenses right away, you may not have enough time to boost your score.
The Takeaway
If you need help tackling an emergency expense, you have options even with a low credit score. Make sure you find the best possible one by keeping these tips in mind. A slow and methodical approach to your search helps you make an informed decision that fits your finances.
