Taking out personal loans for rebuilding credit is a counter-intuitive move, but it can help your credit score if you handle the money wisely. The five main factors that make up your credit score are each weighted differently. This information can be used to help you determine your financial capabilities and the best loan options for you.
Car loans
To rebuild your credit score, it is important to pay your car loan on time. Late payments will only slow down your credit repair efforts. Fortunately, it is possible to find decent car loans for rebuilding credit. It is not easy to find a decent car loan interest rate with bad credit. However, you can find one if your credit score is good and your payment history is positive.
Lower credit scores often lead to higher interest rates. This is why it's so important to shop around and find the best deal. Another option is to postpone your purchase until you rebuild your credit and are eligible for a lower rate.
Installment loans
If you pay your monthly payments on time and have good financial habits, installment loans can help to improve your credit score. Each time you make an installment, these loans are reported to credit bureaus. This can boost your credit score. Be aware that late payments may cause credit score to drop. You'll need to find an alternative credit source if you aren't able to pay your monthly bills on time.
Most lenders will require a minimum credit rating before granting you an installment loan. The reason is that borrowers with high credit scores are more likely than others to repay their loan. Some lenders will also consider your annual income in determining your interest-rate.
Payday loans
Payday loans work well if you are in a pinch and need money quickly. They can be expensive and you will need to pay back within two weeks. These are not for the weak of heart. In fact, they can cause more damage than you might expect to your credit score and could even cost you more.
While a payday loan is fast and easy to get, it can be difficult to repay. These loans do not require large monthly payments. Choose an installment loan with fixed monthly payments that are amortized over a set period of time. These loans can be used to lower monthly payments for those with bad credit.
Co-signers for installment loans
A co-signer installment loan is available if you are working to improve your credit score and need cash to purchase a home or a vehicle. However, it is important to remember that defaulting on an installment loan will lower your credit score. Because lenders look at your credit history as a risk, they'll be less willing to give you the best loan terms. They might repossess your collateral.
Fortunately, there are many alternatives to using a co-signer for an installment loan. Most people will request a friend or relative to sign on a loan. This commitment can lead to long-term problems and could even endanger a relationship. That's why it is a good idea to learn more about other loan options.
Fairstone personal loan
Fairstone may be able to help you if you have poor credit or need to rebuild your credit. They offer personal loans, both unsecured or secured, and have more branches than 240 across Canada. It is easy to apply for a personal loan. You can use your credit score, financial information and other financial information in order to determine whether you are eligible.
Although the application process can be long, you can complete it online or at a branch of Fairstone. You can also email documents and other details. Although the application process can be slow, it is faster than most lenders. Fairstone reviews don't exist online so it's difficult to judge their customer service.