Credit score is your reputation in the banking world. If earlier, the size of salaries played a greater role in granting loans, now all financial organizations make decisions based on the credit history. Now it’s clear why you should be very careful about your financial reputation. What to do if the credit history is already spoiled, and banks refuse issuing loans? We will tell you where to start and how to improve your credit reputation gradually.
- 1 What is a “570-639” credit score?
- 2 Can I get a loan with “570-639” credit score?
- 3 How much loan can I get with “570-639” credit score?
- 4 Where can I get a loan with “570-639” credit score?
- 5 How to get a personal loan with “570-639” credit score?
- 6 How to fix/improve credit score “570-639”?
- 7 Do I need to take a loan if I have a poor credit history?
What is a “570-639” credit score?
A poor credit score is the result of untimely repayment of debt obligations or the complete cessation of payments on an existing loan.
What affects the formation of poor credit history?
The first thing that credit organizations and banks want when issuing a loan is to avoid the risk of non-repayment of borrowed funds. Therefore, they carefully study the credit history of the borrower. And of course, here the main reason for refusals in cooperation is delay in loans issued earlier.
Your credit score ceases to be ideal, even if you have at least once late payment for up to 5 days. This is the easiest violation and usually it does not greatly affect the decision of the bank or credit institution. Repeated delays from 5 to 35 days are already considered an average violation. Nevertheless, with delays in payments, you still have a chance that the bank will make a decision in your favor.
Of course, everyone has moments when we cannot pay on time. In case of financial difficulties, it is better to inform the bank immediately about this and explain why there was a delay, how you plan to stabilize the payment schedule and when you can pay the necessary amount. As a rule, banks may even offer several options for overcoming the current situation. They are interested in you paying the full amount.
Also, be very careful when making a payment. It may happen that you paid on time, and the money reached the bank only after a few days. In this case, you also count the delay. It often happens that when you pay, you underpaid mere pennies, but your lender is not your friend who will forget about such trifles. Huge fines can be imposed from cents, not to mention the fact that your credit history will suffer.
Unpaid loan or its full non-repayment
If in your credit history there was at least one such case, the bank will not take risks and give you a second loan. Before you can become a borrower again, you must first work on improving your credit history.
If a criminal case is brought against the borrower or a lawsuit is filed
Failure to pay utility bills or any other services, collection of alimony or debt to a neighbor will undoubtedly affect credit history.
Also, the credit score is negatively affected by:
• Frequent lending applications.
• Guarantor status.
• The continued presence of a balance near zero on active cards.
• Very early repayment of loans.
Can I get a loan with “570-639” credit score?
A client with a damaged financial reputation is denied access to credit products of most banks. But, as a rule, the situation is not hopeless and you can restore the confidence of banks.
How much loan can I get with “570-639” credit score?
With a poor credit history, it is very difficult to get a large loan right away. In such cases, it is better to try starting with small loans, the percentage of approval for which is quite high. For example, you can take loans for the purchase of household appliances. If the borrower does not violate the deadlines, in the future his/her chance of receiving a large amount from the bank will increase significantly.
Where can I get a loan with “570-639” credit score?
With minor violations of payment discipline, you can get a loan from a bank. However, most likely it will be approved at the maximum rate and for a minimum period. In addition, you can apply for a loan secured by a car, real estate or with the assistance of guarantors.
Pos-credit for goods
When applying for a commodity loan (especially with a down payment), banks present less stringent requirements for potential borrowers.
This specialist knows the requirements of banks for borrowers, is familiar with the specifics of specific lenders’ work. Application, as a rule, is submitted only to those banks where the likelihood of approval is maximum. A competent broker can help with obtaining a loan in very difficult situations, but you will have to pay for his services (usually a percentage of the loan is taken).
Microfinance organizations work with borrowers with problematic credit score. But you will have to overpay on a microloan much more than on a bank loan. It is better to contact one of the large companies, as they transmit information about borrowers to the Credit Bureau.
How to get a personal loan with “570-639” credit score?
The credit history contains complete information about all committed financial obligations to banking organizations. Poor credit score indicates a direct violation of the loan maturity dates.
Nevertheless, some banks are willing to take the risk and arrange a loan even for such a category of borrowers. One of the important requirements is a certificate of regular income of the borrower. To increase the chances of approval, you can prepare a package of documents that will confirm the improvement of the financial situation. For this, any information on raising the salary, changing jobs to a higher paying one, a confirmed possibility of obtaining additional sources of income, is suitable.
How to fix/improve credit score “570-639”?
None of us are safe from unforeseen circumstances: loss of work, urgent repair of an apartment or a car, health problems. Everyone can have financial difficulties and credit history can become poor at one moment. It is impossible to fix the credit history, but it can be significantly improved. Here you need to be prepared for the fact that it will take 2-3 years to improve. Since the bank, when requesting a credit score, your reputation is usually of interest over the past few years.
Pay regularly on all bills
If you decide to improve your credit score, the first thing to do is to become more responsible when paying bills. When a bank sees that you have been an exemplary payer over the past years, your chances of getting a new loan increase.
Agree with the bank in which you have overdue a loan for debt restructuring
If you have difficulties with monthly loan payments, it is best to go to the bank as soon as possible and try to explain the situation and agree on a deferment. For example, you were sick for a long time and could not work, your salary was delayed and therefore you could not pay the loan on time. All these facts can play an important role and convince the bank to meet you.
It is the bank that brings data about your credit history, so the sooner you engage in restructuring, the sooner your credit history will become positive.
Take a microloan
Despite the fact that it sounds rather absurd, this is one of the most effective options. Of course, the bank will not give you a loan, but currently there are many microfinance organizations. They are usually not so strict about credit history and the process of obtaining a loan is very simple. You can even arrange some loans online in minutes and without any fuss with documents. Typically, such microloans are issued for a shorter period and at a slightly higher percentage, but the process of issuing money is much faster and easier.
If you take a microloan and repay it in a timely manner, data about you as an exemplary borrower will be sent to the Credit Bureau. Accordingly, your credit score will gradually improve.
Usually, the more often you use the services of microfinance organizations and return the money on time, the better the conditions for the next microloan will be.
You can also just buy household appliances, a fur coat or make any other purchase on credit. If you return all the money on time – this has a positive effect on your financial reputation.
Improving your credit history requires patience and discipline, but the sooner you start, the faster you reach your goal and improve your credit reputation.
Do I need to take a loan if I have a poor credit history?
Now that we have figured out everything about whether loans with poor credit history are issued, it remains only to consider whether such a loan should be taken at all. If you have a poor credit score, it means that in the past you were either late with loan payments or did not repay the money you borrowed at all. Basically, these credit scores show whether the lender can trust you or not. Since non-bank lenders have more profits, they take more risk and hope that customers who spoiled their credit history before have changed, and therefore often give them a loan. Therefore, you need to take more responsibility on yourself, as a client, and you yourself must know if you have changed, and whether you can repay the debt on time this time so that it doesn’t turn out that you don’t do it again and you accumulate penalties interest and then the case may still reach the court. So, if you yourself are sure that you can repay this loan, then a loan with a poor credit history can help you well – to restore the creditor’s trust, to receive money at the moments when they are really needed. By borrowing it several times and returning it on time, you will gain confidence and you will be able to get loans more seriously and you will slowly be able to start borrowing at banks. But if you are not sure that you can repay the loan, then we do not advise you to apply for a loan, because it will further spoil the credibility of you and your financial situation. Also, our website provides detailed information about “500-570” and “640-699” credit scores. Webmoneyloans is always ready to help you.