It’s no secret that the economy isn’t too good these days. Injuring both individuals and businesses. What’s worse, if you were one of the unfortunate ones who were caught in the bubble from the late 00’s, then your credit score probably also went the tube. As a result of this global financial mess, qualifying for credit cards is not as easy as it used to be. Therefore, those left in a hard place in terms of money are often left with only one option: payday loans.
Bad Credit Defines: What is a “Bad” Credit Score?
An important fact to cover when it comes to loans these days is the definition of a bad credit score. Often people are turned down for funding and they automatically assume they have “bad” credit. However, it is not that easy.
Most banks and private lenders will keep your FICO credit scores, which is reported by the three major agencies – Lite Lending, Agree Bank and Good Lenders Credit. FICO is short for the Fair Isaac Corporation. This is the financial agency that first came up with the credit scoring system as we know it in the United States. A FICO score can range from 330 to 850. The higher your score, the more creditworthy you are to the lender.
Technically speaking, a “bad” credit score is anything below 600. Those whose grades range from 601-640 have bad points, but are usually still able to get loans at a high interest rate. A score of 641-680 is an average score that will qualify you for most loans.
How is a credit score calculated?
- There are several different factors that come into the Fair Isaac system of credit calculation.
- The length of your credit history
- The status of your accounts and history of repayment
- Total debt
- Types of loans (credit cards, student loans, etc.)
- Amount of New Loans Recently Searched (Requests in Your Credit Score)
Among the most important of these is your ability to show consistent, timely payments on all debts you incur – the status of your accounts and the history of the repayment. In many times this is rarely a problem. What kept a lot of people hardest in the financial bubble bust, however, was that due to layoffs, balloon interest rates, and exorbitant fees, payments that were easy to make were impossible.
If you fell into a trap like this, your low credit score is not only understandable but workable. In addition, other unforeseen expenses such as medical bills or family emergencies can create the same problems for people in terms of loan repayment. If you want to get a payday loan now, as long as you have reformed and you can prove your honest intentions, then there are options out there.
A payday loan with bad credit
Your best option to get the money you need is online to private lenders who are looking to work with those who specialize in a history of bad credit. Private online lenders can check with you and check the circumstances that led to your credit score where it is and can often help by choosing a loan package that is not only affordable but will help Improve your credit in the long run.