Those looking for money in the current financial environment are finding it harder and harder to gain loan approval, even in the realm of bad credit loans. There are many reasons why someone may be rejected for a fast bad credit loan, and if you are one of them it is important to consider these four reasons.
1. Bad Credit
Why would someone be denied a bad credit loan because of that bad credit? Well, the simple fact is that though bad credit loans are out there to provide relief to those with poor credit, it does not mean that anyone with bad credit will automatically receive a fast bad credit loan.
The reasons for your bad credit score are what will help to determine whether or not you are a suitable candidate for these loans. Is your credit poor because of an emergency circumstance that made it impossible to pay your bills for a short period? Did you have a reckless youth where you ran up credit card bills without thinking, but have spent years trying to pay them off? These are the poor credit circumstances that lenders are more willing to work with.
If instead you have a chronic history of late payment or default, or if there are many checks on your credit from several lenders over time, you will not look as appealing to banks. This history shows a lack of responsibility and desperation for money. If you want to take a loan, it is important to reform these habits and repair your credit score.
2. No Credit
If you have no credit history you are as risky as someone with a poor credit history to many lenders. This is because they have no way to know if you will pay them back. If this is the case for you, then you need to take simple steps to start building a credit history. This includes having a bank account and taking out one or two credit cards which you responsibly pay back each month. Look for cards that specialize in serving first-time credit-seekers, such as those offered by department stores and supermarkets.
3. No Collateral
In the lending world, the best way to get the best deal is through collateral. That is, you need to own some sort of real property, such as a home or a vehicle, against which you can leverage the money that you borrow. Even those with a credit score near 0 can borrow if they have collateral because the value of the property is seen as insurance against the loan. In other words, if you cannot pay, then the bank can take your home or car.
4. No Income
If you are unemployed, there are loans out there that are designed to help you, but fast bad credit loans are not among them. Those looking to borrow money need to be able to prove to lenders that they have a steady means of income with which to pay it back. Also, if you do not make enough money to have extra left over each month to repay a loan the same scenario plays out.
There Are Options
If you have been rejected for a fast poor credit loan, it is important to know that there are options for you in addition to those outlined above. For example, you can look for a cosigner who has better credit or income than you to help you qualify for the loan. You can also take advantage of the many resources available on the internet and shop around for a lender willing to work with you.
Finally, you need to remember not to give up. Though you need money now and want to take advantage of a fast bad credit loan, sometimes taking the time to repair your credit or look for the best deal out there will pay off best in the end.