Posts tagged with "Best Loans for Bad Credit"

6 Expert Tips For Rebuilding Your Credit

When you have bad credit, it can be hard to qualify for loans, rent or buy homes, or even get hired by a new employer. It also can be hard on your emotional health and negatively affect your relationships. If you find yourself asking, “Where can I get a loan with bad credit?”, we hope you’ll think of us. However, while you can qualify for a bad credit loan with us in Texas, we also want to help you improve your credit score and financial future. In our blog today, we will provide you with helpful tips and expert advice for when you’re trying to rebuild your credit.

Not sure what’s affecting your credit score in the first place or how your credit score works? Check out our blog post on what’s impacting that respected number.

1. Find out your credit score

First things first, right? You won’t be able to improve your credit report unless you first know what it is and what your goal is. Here’s what your number means:

  • 300-619: poor or bad credit score
  • 620-679: average credit score
  • 680-739: good credit score
  • 740-800: excellent credit score

Even if you’re in the average range, many lenders are wary and will either charge higher interest rates or not give you a loan. When you have an excellent credit score — as you can imagine — more opportunities will be available to you.

When you find out your credit score and check your credit report, see what specifically is affecting your credit score: Late payments? Missed payments? Your debt utilization ratio? Whatever it is, make that your focus.

You’re allowed to order a free report from each of the three credit bureaus in one year, so order one today to get started.

2. Catch up on payments

Your payment history is responsible for 35 percent of your credit score. In other words, being behind on payments is the biggest influencer on your credit score. You most likely can’t pay everything at once, but don’t worry — contact your creditors, work out a payment plan, and start paying what you can.

When you’re going through this process, you need to be ruthless. Pinch pennies wherever you can, make a plan of attack, and keep to it. When it seems overwhelming or ineffective, look at all you’ve paid over the last couple of months and envision how nice it will feel when you’re no longer in debt.

3. Pay bills on time

Even if you can’t pay the entire amount all at once, make sure you pay the minimum amount possible at the very least. This even includes non-credit bills such as utility or rent payments. These late payments can be reported to the three credit bureaus and negatively impact your payment history as well.

If you have a difficult time remembering to pay bills, set up automatic withdrawals or reminders so you don’t miss any payments.  

4. Chip away at your debt

This is similar to the last tip, and just as important if you want to get out of debt and really improve your bad credit score. Your credit utilization ratio comes in right behind your payment history in order of impact on credit score — 30 percent of your credit score is determined by your credit utilization. For example, let’s say you have a credit availability of $10,000. If you have used $8,000 of that, then your credit utilization is 80 percent.

Owing a large percentage of your available credit will count against you on your credit report. For this reason, you’ll want to pay down your remaining debt as quickly as possible. Have a garage sale, find a second job, cut back on expenses — whatever it takes!

5. Avoid closing or opening credit card accounts

The age of your credit account is responsible for about 15 percent of your credit score. While you’re trying to improve your score, avoid altering the age of accounts whenever possible. If you have to close one because of how late you are on payments, then there’s no way to avoid it. However, keep all the same credit accounts whenever it’s in your control.

6. Be patient

Just as you most likely didn’t get yourself into this situation in one day, you won’t be able to get out of this situation in just one day either. It could take 60-90 days (or longer) before you even start to see your credit score improve, and depending on how much debt you have it could be years before you see the credit score of your dreams.

As you follow all of these tips though and practice good financial habits, you can be confident that you’ll one day see a credit score above 700. And even if it takes years before you get there, at least you’ll save thousands of dollars in interest in the process.

If you’re not quite there yet, then that’s OK. When you need a loan but have bad credit, Your Loan Depot can still help. We have some of the best loans for bad credit in Rosenberg, Tomball, Mansfield, Humble, Conroe, and our other Texas locations. We’re happy to provide loans for people with poor credit and help them get back on their feet again. When a financial emergency hits, your credit score won’t wait for you. Let us help — get a loan with bad credit today!

What Are the Factors Affecting Your Credit Score?

Needing a loan already means you’re in a tight financial situation, but when you have bad credit the situation can seem even more intense and restricting. At Your Loan Depot in Texas, we still approve loans for people with poor credit. If you need a bad credit loan, feel free to contact us to see what we can do.

Have you ever been curious about how your credit score is determined though? If you know exactly what’s contributing to your bad credit, then you can know what changes to make to improve it.

FICO® Scores are always determined and calculated by negative and positive information in your credit report. Most people know that a late payment will negatively impact their credit scores, but FICO actually outlines exactly what factors affect its calculations.

Payment History: 35 Percent

You guessed it: that late payment (or two or three…) carries a lot of weight with your credit score. Any lender you go to for a loan wants to see that you paid past bills and credits on time.

If you’ve messed up a lot of payment dates, though, the good news is that credit scores will notice if you establish or reestablish a good track record of making payments on time. So if the last time you missed a payment deadline was a year or two ago, FICO will notice and won’t damage your score as much as if you missed last month’s payment date.

Because of how much weight is given to your payment history, the best thing you can do to initially improve your credit score is make your payments on time — even if you’re just paying the minimum amount due.

Amounts Owed: 30 Percent

If you owe a lot on your credit card or previous loan, that doesn’t mean you’re automatically going to have a hard time getting a payday loan in Texas. However, if you’ve used a large percentage of your credit limit, it can indicate to your potential lender that you’re more likely than another person to make late payments or fail to pay altogether.

The total balance on your last statement is the amount that your credit report takes into consideration.

Length Of Credit History: 15 Percent

We see a big drop in the weight of this item and the previous factor. Different aspects will be considered with the length of your credit history:

  • How long you’ve had your credit accounts
    • The age of your oldest account
    • The age of your newest account
    • The average age of all of your accounts
  • How long you’ve had specific accounts
  • How long it has been since you used certain accounts

Longer credit histories generally improve your credit score because it shows your patterns, payments, and reliability over a longer amount of time. However, if your credit account is new but the rest of the factors are OK, then your credit report will most likely be fine.

Credit Mix: 10 Percent

How many different credit accounts do you have? Credit scores look into this. They’ll consider your credit cards, installment loans, mortgage loans, and even your retail accounts.

Having very few or very many credit accounts won’t be a huge determiner in your credit score, and you definitely don’t want to open credit accounts that you won’t use. This factor is generally of most use when there’s not much other information on which to base a score.

New Credit: 10 Percent

This factor is similar to the length of your credit history. If you open several new credit accounts in a short time, your credit score may be at risk (especially if you don’t have a long credit history from other credit accounts).

To protect yourself from this in the future, be careful with how many new accounts you have at once. You score won’t drop drastically if you apply for new credit, but it’s more likely to drop more if you open several new accounts rapidly.

These percentages aren’t quite as cut and dry as is listed here, but it’s a good starting area. A category’s importance can vary per person, especially if you don’t have a long credit history.

At Your Loan Depot, we offer some of the best loans for bad credit. If you find yourself asking “Where can I get a loan with bad credit?”, then we hope you’ll think of us. We offer title loans and payday loans to help you get back on your feet, and we’re in ten locations throughout Texas. Now that you know how credit scores are determined, you can better work to improve yours.