A bad credit score affects your creditworthiness and makes it difficult for you to get loans legally. To fix this, you can obtain a bad credit loan in Singapore and work on converting your poor credit score into a good one.
Before we talk about good and bad credit scores and their significance, let’s look at what a credit score is.
In simple terms, the credit score indicates the repayment probability of the borrower. It gives the lender insight into the borrower’s credit history, with the help of which the lender will decide whether or not to loan money to the borrower.
Needless to say, a good credit score is evidence that the borrower’s financially responsible as he or she takes pride in making repayments. On the flip side, a bad credit score puts the borrower in a poor light as it indicates a high risk of default.
Like it or not, the borrower’s credit score also impacts all other decisions that lenders like licensed money lenders make. Here are a few important ones:
- Loan application approval or rejection
- Deciding on your interest rates and other loan terms and conditions
Did you know some employers also consider your credit score before offering you a job? This is especially true if you’re working in the finance industry.
Hard truth: A good credit score opens up a wide variety of loan options for the borrower. Having a good credit score can fetch you financial help when you need to take out loans.
What if you have a bad credit score? Does that mean you cannot get a loan when circumstances are dire?
Not necessarily. The best option you have is to take loans for bad credit from licensed money lenders.
If you work on improving your credit score, you need not have to worry about getting a loan from any legal loan provider on a rainy day.
One of the most important reasons why borrowers have a bad credit score is due to missed payments from their multiple loans. It can be challenging to stay on top of multiple loan repayments month after month considering their due dates may be scattered throughout the month.
Debt consolidation and payday loans can help you manage your payments and improve your credit score over time — just be sure to make your loan repayments on time!
With a debt consolidation loan from a private, legal money lender, you can consolidate separate debts into one, making it much easier for you to keep track and make repayments. That’s not all. There could even be the added advantage of interest savings.
There are various reasons why a legal money lender can be of great help when you want to get loans for bad credit.
First and most important, in Singapore, legal money lenders are regulated by the Ministry of Law’s Registry of Moneylenders. They are not allowed to charge more than 4 percent interest per month. So, whatever your financial status or repayment capacity may be, your interest rate will not be a sticker shock.
Money lenders are better than banks in many ways, too. For instance, the loan application and approval processes are faster, easier, and far more convenient.
Just so you know, banks typically do not entertain borrowers with bad credit scores. Licensed money lenders, on the other hand, are willing to consider individuals with not-so-good credit scores for loans.
Even if you can get a bad credit loan right now, you should take steps to improve and maintain your credit score at its best. Here are some surefire ways to boost your credit score:
Even this most mundane thing can hint towards your ability to pay for services you use, and in turn, throw light on your repayment capacity. Defaults in bill payments might go against you. So, pay all your bills on time.
Credit cards can improve your bad credit score if you use them to your advantage. How so? Make sure you pay off your credit card bills in full before their due dates. Do this month after month and you’ll see your credit score improve.
But of course, keep a keen eye on your credit card expenses. This works even if you use your credit cards minimally.
Don’t let a bad credit score deter you. Take a bad credit loan and improve your credit rating. Be sure to keep up with your repayments according to your loan repayment schedule consistently!