Digital News Report – Bad credit loans are for those individuals that do not have a good FICO score. They may have had late payments, and have maxed out their credit or other negative credit behaviors that can lower their FICO credit score ratings. Despite having a bad credit score, these individuals can find lenders that will offer bad credit score loans to them.
A FICO score that is between 580 to 619 is the start of a poor credit score. Between 500 to 580 you have a bad credit score that has serious implications. If you have a FICO credit score below 499 you are in seriously trouble bad credit rating. The lower the credit score the harder it is to get a loan, but some bad credit lenders are ready to loan to those that have less a poor credit score because they can charge a considerably higher interest rate on a loan than they would to someone with excellent credit.
You can find out your credit score for free through the FTC approved website annualcreditreport.com. The FTC states that this is the only authorized source under federal law to get a free annual credit report. You can also get the free credit report by calling 877-322-8228. Everyone should find out their credit score at least once a year. Those looking for a personal loan or auto loan should know their score so that they can shop around for the best interest rate, even if they have bad credit.
There are two types of loans, an unsecured and a secured loan. If you have bad credit, it could become more difficult to get an unsecured bad credit loan. The reason is because you are at a higher risk for not paying back the loan, and the lender doesn’t have property that can be easily taken for non-payment.
A secured loan is and agreement were you put up property in exchange for the cash loan. Many times a secured loan comes in the form of a home loan or a car loan. The home loan is often called a second mortgage or a home equity line of credit or HELOC. The car loan is often called a Car Title Loan.
If you fail to pay on a bad credit secured loan, you could end up losing the property that you put up for collateral if you miss a payment. You should always carefully consider all aspects of why you are taking out the cash loan, and to have a game plan to repay the loan in a timely manner. If you don’t have that game plan, you might need to seek out help from a credit counseling service to learn about budgeting your finances better.
By: Victoria Brown