How do I know if I have bad credit?
How do I know if I have bad credit?
You may have heard of the term ‘bad credit’ – but perhaps you don’t actually know what it is, or whether indeed it applies to you.
Finding out whether you have bad credit is important, especially if you’re considering getting a loan for a major purchase such as a car or a home. You’ll be better informed about where you stand in terms of your credit score and what you can expect lenders to offer you as a borrower.
Is your borrowing power weighed down by bad credit? Speak to Loans for People with Bad Credit today.
Understanding bad credit
Taking time to understand what bad credit is, as well as understanding how it might affect you, can be really helpful long term.
In Australia, your credit score (also called a credit rating) is a numerical score, which shows how trustworthy you are as a borrower. It is a summary of all the information on your credit report, combined into one number.
Some of the things your credit score takes into account include:
- Previous unpaid loans
- Defaults on previous loans
- History of bankruptcy
- Previous credit applications.
You want your credit score to be as high as possible to attract as many reputable lenders as possible. This score directly affects the amount of credit that lenders will allow you to borrow as well as the interest rates the lender could offer you.
The effects of bad credit
If you find out that you have bad credit, you’ll want to know what the likely effects are and how your potential to borrow money might be affected.
Don’t panic if you have bad credit – there are lenders out there who can help you and plenty of Australians borrow money each day despite low credit scores.
It’s still useful to be aware of some of the following ways that having bad credit could affect you:
- Rejection from lenders: many banks and lenders have set criteria and they simply won’t lend money to people with bad credit scores or with a history of bankruptcy. Finding the right lender is essential to successful loans with bad credit.
- Higher interest rates: people with bad credit are often seen as higher risk to a borrower so you’re more likely to be offered a loan with higher interest rates to compensate for this.
- Secured loans: think about whether you have anything that you could offer as security on your loan. If your credit rating is low, you’ll want to reassure your lender that if you default on your loan, they’ll be able to repossess an asset you may have.
Finding out your credit score
Your credit score can make a real difference to your borrowing capability so it’s vital that you have researched everything there is to know on your credit rating and your credit history before you apply for a loan.
There’s no excuse either – finding out your credit score is quick and easy to do, and it won’t cost you a dollar. At Loans For People With Bad Credit, we offer credit checks free of charge!
Knowing your credit score in advance of applying for a loan means you can direct your applications to the right lenders. Remember this is really important because any rejected applications will be visible on your credit report for other lenders to view.
Got bad credit? Here’s what to do next
If you find out that you have bad credit, there are lots of things you can do to help improve your credit score.
Asking for expert help is the first step. Speak to Loans for People with Bad Credit to ensure you’re doing everything you can to help yourself. We have access to a wide range of appropriate lenders as well as years of experience working with people with bad credit.
In the meantime, you need to be making sure that you’re doing everything you can to keep your financial situation as stable as possible. Stay in a regular job, maintain a stable address, have all your documents in order and don’t make any loan applications until you’ve spoken to us.
We’re here to help. Contact our bad credit loan specialists on 1300 769 384 today!
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