Your credit score is your financial signature. Almost all companies in the US look at your financial history before granting you any of their services. This holds true even in utilities and rentals. So it is, without a doubt, very important to take care of your credit score at all times. However, things happen, most especially during these difficult times, and before you know it your credit score has already plummeted until you are not qualified to obtain a low-interest loan from your lender.
The good news is that there are various ways to get back those great scores and one way to do so is to move your credit card debt to personal loans.
How does such a move help?
The fact is, the kind of credit you’re using also has an impact on your credit score. Unfortunately, a credit card debt is recorded to have a bigger blow on your credit score than a personal loan. So if you convert that debt into a personal loan, then you can possibly boost your score by more or less 100 points.
As published in the Wall Street Journal, the current system used in credit-utilization ratio skips installment loans; and personal loans are perfect examples of installment loans. Hence, this will result in a credit card debt of zero dollars on your credit report. As a result, you get 100 points or more. That’s a big boost to your credit score.
In addition, most personal loans tend to have lower rates compared to credit card debts, with a difference or about 2% to 4%.
But of course, note that to effectively reverse your bad credit using this strategy, it is important that you pay off all the charges on your credit card as soon as possible.
Get a Loan without Collateral
It is a common notion that collateral is required when you apply for a loan. This is true when you take a loan from the bank and other lending institutions. Sometimes, collateral is even needed when you make a personal loan from a family member or friends.
However, not all people have collateral or willing to provide collateral whenever they need to borrow money. This could be a serious setback, especially if the case is an emergency and money is needed right away. And if you don’t have good credit score, the case turns from bad to worse.
Unsecured Bad Credit Loans Do Not Require Collateral
Today, it is easy for people with bad credit to apply for a loan without any collateral. This scheme provides a hassle-free approach especially for people who need cash in an instant. With the loans market expanding considerably and has now included people with bad credit, getting a loan without collateral to show is now a breezy affair.
The first step towards getting a bad credit loan without collateral is to look for a reputable lender offering unsecured loans. The lender may ask you some personal information, such as your sources of income and credit score to gauge if you qualify for a loan or not. In most cases, you are eligible for online loans for people with bad credit even with poor credit score as long as you have a proof of income to show. Furthermore, you can get the loan the same day it was approved, allowing you to mitigate the financial issue the soonest time possible.