The credit rating system is a mixed blessing. On the one hand it protects the interest of lenders as the system helps them analyze where they can lend money safely. After all, when you are lending money, you want to be sure that the borrower can return it back. You want to protect your risks. Individuals with a high credit score are deemed safe.
On the other hand, it can either be a boon or a hassle for individuals. The credit rating system works well for those with a high score, because it improves their chance of getting credit. But it is bad news for those with a poor or average score. Banks and most other lending institutions won’t give them a loan because they are deemed risky clients, on account of their less than perfect credit score.
That does not mean people with low credit score cannot get a loan. We have been offering second payday loans to many consumers since a lot of years now. Obviously people applying for a second payday loan have low credit scores and find it difficult to pay off their first loan. We still offer help to them.
Flaw in the Credit Rating System
Sadly, the credit rating system isn’t perfect by any means. Let’s take an example to understand this better.
Let us assume that you took a loan 3-4 years back and delayed making a few payments, but were able to pay it back eventually. The fact that you fell behind with some of the payments will have surely gone into your credit history. And it brought down your credit score. That is bad news, as your poor credit score is likely to stay unchanged for several years, and this will negatively impact your credit-worthiness. Which means that, most lenders will treat you as a risk.
But here’s the catch. It’s entirely possible that you could have turned things around in the meantime. 3-4 years can be a long time. However still, your better financial status won’t get reflected on your score. In other words, your credit score won’t improve. Credit rating agencies are known to maintain their records for up to 7 years.
Take another example.
An individual takes a loan 3-4 years back and pays back everything on time, as scheduled. And thus, his credit score is excellent. But in the meantime, he has fallen into difficult times. He is not as financially sound today, as he was before. But, the agencies won’t note that yet, thanks to his paying back the last loan on time.
This is exact reason why you see people with good credit score defaulting on their loans.
Of course, the person won’t complain. But it’s an entirely different matter if you belong to the first category, that is, if you have a poor credit score. That’s because, very few lending companies will give you a loan. And even if a cash advance is made to you, the interest rate is likely to be very high, and the terms are likely to be very strict.
A Payday Loan Can Help If You Have Poor Credit Score:
If you need some cash to see you through till the next payday, the only companies you can approach are the payday loan lenders, and not the big banks. That’s because, these lending agencies won’t check your credit score before deciding whether to approve or reject your loan application. So, those with a poor score can also get the money they need from themselves.
It’s safe for the lenders, as payday loans are for small amounts only (usually between $100 and $1000) and for the short-term (till the next pay day). The stakes are never very high. You will just have to show that you have a regular source of income. And of course, you should be over the age of 18 years, and should have a valid checking account.
But here’s the best part – did you know that those with a poor credit score can actually improve their credit-standing by taking a payday loan?
How to Improve Credit Score by Taking a Payday Loan:
Just take a payday loan and repay back the amount, plus the interest, and the fees on time. You need to remember just two little things. Only take what you need to. Don’t ever splurge with the loan money. Repaying the money is going to be relatively easier for you, as these are small amount loans, so you never have to repay back a lot of money. The total outflow towards interest is also going to be less naturally.
But remember that your lenders should be licensed in their states to offer loans. If you take a loan from an unregistered company or unlicensed lender then even if you payback the loan on time, there is no chance that your credit will improve. For your credit to improve its very important that all cash that you payback should go into the record books along with your social security number.
The fact that you could repay the loan on time and honor your commitment is going to go in your favor. This is bound to improve your credit-standing in time, as your credit score is sure to go up. Do this a couple of more times, and you have an even better chance of getting noticed quickly. Lenders will be ready with their cash as you won’t be a “risk” any more. You will have better interest rates and easier terms for all future loans you might need to take.
It’s a smart strategy and it works all the time. In fact once your credit improves you can negotiate for better lending rates for all types of loans.
The problem with people with a poor credit score is that, nobody is going to give them a chance to prove that their financial situation has improved. No bank or conventional lending company will give them the opportunity of proving their credit worthiness. You just have to think a bit differently, and you can solve the issue.
In fact, it is the only chance you have got to improve your credit score quickly. It is the only way to rectify your score without breaking the bank. And the good thing about this strategy is that, this is completely legal.
There are no harassment or denials. Remember, your payday loan application is always going to be approved by us, as long as you have a steady monthly income.
Payday loan companies are closely monitored by financial regulators. Legal pay day loan firms follow all government regulations and business norms. It’s an entirely legal business. So there is nothing really for you to worry about. Thousands of people from around the US are taking a payday loan to solve their temporary cash crunch situations. You can too.
The money is delivered to your bank account quickly – usually within 24 hours of applying and sending your confirmation of the terms and conditions. You can apply for a payday loan from your home, over the internet. There is no office to visit and no standing in long queues. You don’t even have to tell the loan officer why you need the cash advance. No wonder, payday loans have become so popular now.
We as lenders feel just because you were unable to pay your loan 4-5 years back, should not become a constraint when you want to apply for a loan now. Yes that does not mean we do not follow any measures to offer you a loan. We have our own internal process to check who qualifies for our loans. But it certainly is not your credit score. Rest assure, most people qualify for our loan.
Thank you for visiting our website. Hope we helped you get a loan.