Applying for a loan is a brain wrecking process in itself with all the paperwork and jargons involved. This becomes even more difficult if you have a poor credit score. Credit scores range from 300 to 850. Having a FICO score of 579 and below means you have poor credit score. A FICO score of 580 to 629 means you have a bad credit score. To qualify for loans, your goal should be to improve your credit score (ideally it should be above average, i.e. FICO score of 630 and above).
Other than credit score, other factors like debt to income ratio, determine the terms of your loan. Having a poor or bad credit score almost always means a higher interest rate. If you have poor credit, but have a steady income and low debt levels, the probability of you securing a personal loan is higher.
As a borrower, you may have bad or poor credit due to one or more of these reasons:
To procure a loan in spite of having poor credit:
The first step should be to contact your local bank and apply. If you already are their customer, chances are they might offer you an unsecured personal loan. There are some financial institutions which specialize in offering bad credit personal loan. The banks look for – your length of credit history, fair to bad credit score, collateral in case the loan gets defaulted.
In most cases, traditional banks do not offer loans to those with poor and bad credit. That being the case, you can always look for online lenders. Benefits of procuring a loan from online lenders are the convenience and swiftness of process, flexible repayment tenure etc.
Approaching peer to peer lenders. These companies use technologies and data analytics to more accurately assess whether the borrower is deserving of the loan or not. Credit score is not the only guideline they use. The data points they usually consider are “ income, expenditure trends, educational qualification, any assets and investments etc.
Technological developments have inadvertently made lending money, especially for those with poor and bad credit, a simpler task. As internet security has grown in leaps and bounds, money gets transfer to the borrower’s bank account seamlessly and swiftly. Online also provides the convenience of gathering data from multiple sources and thus making an informed decision.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.