It may seem counterintuitive that you would take out personal loans to repair your credit. However, this can improve your credit score if it is handled well. The credit score is calculated using five factors with each having a different weight. You can use this information for determining your ability to afford loans and what type of loans may be most suitable.
Car loans
If you want to rebuild your credit score, you need to make timely payments on your car loans. A late payment will only set back your credit rebuilding efforts. There are decent car loans available for rebuilding credit. While it isn't easy to find a decent interest rate for a car loan with bad credit, it's possible to find a decent rate if you have a decent credit score and a positive payment history.
Applicants with lower credit scores usually pay higher interest rates, so it's important to shop around to find the best deal. Alternatively, you can postpone the purchase of a car until you have rebuilt your credit score and can qualify for a better rate.
Installment loans
Installment loans can help you improve your credit score. However, it is important to make payments on time. Your credit score will be boosted by these loans reporting every payment to the credit agencies. Be aware that late payments may cause credit score to drop. You will need to find another source of credit if you are unable to make your monthly payments.
Lenders will often require that you have a minimum credit score in order to approve an installment loan. This is because those with high credit scores have a better chance of repaying the loan. In order to determine your interest rate, lenders may consider your annual income.
Payday loans
Payday loans are great for short term emergencies. However, they can have a high interest rate and require payment within two weeks. These loans aren't for the faint of heart. In fact, they can cause more damage than you might expect to your credit score and could even cost you more.
Although payday loans are fast and easy, they can be expensive to repay. These loans are not recommended for those who have to make large monthly repayments. Instead, consider an installment loan which requires regular payments for a fixed period of time. These loans are intended to make monthly payments easier and more predictable for people with poor credit.
Co-signers on installment loans
A co-signer installment loan is available if you are working to improve your credit score and need cash to purchase a home or a vehicle. But, remember that defaulting upon an installment loan will reduce your credit score. Lenders will consider your credit history as a risk and may not offer the best loan terms. They might also repossess collateral.
It is possible to get an installment loan without a cosigner. A majority of those who need a loan will ask close friends or family to sign. This commitment can lead to long-term problems and could even endanger a relationship. You should explore other loan options.
Fairstone personal loan
If you have bad credit and need to rebuild your credit score, you may want to consider applying for a personal loan from Fairstone. There are more than 240 branches in Canada and they offer both secured and unsecured personal loans. It is easy to apply for a personal loan. You can use your credit score, financial information and other financial information in order to determine whether you are eligible.
Although the application process can be long, you can complete it online or at a branch of Fairstone. You can also send details and documents via email. While the application process is a bit lengthy, it is quicker than many other lenders. Fairstone has not posted many reviews of their personal loans online so it is difficult to evaluate the company's customer support.