Get to know Which is the Most Affordable Bad Credit Loan?

The term ‘bad credit loan’ refers to a variety of different loans which are targeted at borrowers who will be rendered ineligible for standard personal loans due to their credit rating.

bad credit loan
bad credit loan

Typically, these loans can prove to be particularly expensive compared to their standard counterparts and therefore it is essential that you find out all of the information that you can before considering applying for one.

When Is The Right Time To Apply For One?
If you need access to more than £1000 and have been rejected by your bank or building society, a bad credit loan may offer the most attainable option.

However, if you wish to explore these options it is important to do your research and then manage it well. By doing this, you will be able to take many of the steps that you need to improve your credit rating so that you will be able to access cheaper financial options in the future.

Types of Bad Credit Loans
As mentioned above, there are a variety of different bad credit loans available, all of which have distinct differences.

Below, we have identified some of the most popular:

• Payday Loans: This type of loan is by far the most widely publicised and should always be approached with caution. Designed to offer a quick fix (essentially to tide you over until your next payday), the APR associated with a payday loan can be exceptionally high. Only available in relatively small amounts of up to approximately £500, full repayment as scheduled will ensure that the costs do not get too high but failure to repay can result in significant costs being incurred.

• Guarantor Loans: This type of loan works in a very similar way to a standard personal loan, except the loan agreement involves a third party guarantor who will be expected to make the repayments if you are unable to do so. These are by far the lowest risk and most attainable of all bad credit loans. If you would like to know where to find out more information, please click on the following link – where I can get a guarantor loan?

• Secured Loans: These are the cheapest option available to ‘bad credit borrowers’ but are associated with a significant risk due to the fact that you will be expected to secure your home against the balance of the loan. Although this will ensure that you are able to borrow a large sum of money, failure to repay the loan will result in repossession of your property.

• Logbook Loans: Similar to the secured loans above, although far more expensive, logbook loans work by using the borrower’s vehicle as security against the balance of the loan. Failure to make the repayments will result in the lender taking away your car.

Using a Bad Credit Loan to Consolidate Debts
Are you looking to consolidate your outstanding debts? Instead of trying to manage multiple repayments on credit and store cards, loans and overdrafts, which may be all on different rates and paid out at different times of the month, a guarantor loan can offer the perfect way to repay them all, leaving you with one easy to manage payment.

However, it is essential that find a loan offering you a lower interest rate than you are currently paying with your other debts, otherwise your overall costs may increase.

What Are The Pros and Cons?

Bad credit loans will be perfect if:
• You have a poor credit history and need to borrow a significant sum of money.
• You need the money quickly for an essential purchase.
• You can afford the monthly repayments.

But always remember:
• That the associated interest rates can be VERY high.
• They should only be used in the case of an emergency.
• You should only ever apply for the minimum amount that you need.

For more information on secured loans –
For more information on logbook loans –
For more information of payday loans –

Repair Credit To Secure Financial Position In Future

If you have been suffering from poor credit it is now time to repair your credit score. It will help you to lessen the high rates of interest which you are paying on loans and will help you next time you apply for a loan. If you fall back on major payments for mortgages and loans it may create a poor credit history. If you fail to pay mobile phone bills and use your credit card unwisely you may be trapped in a situation of poor credit. By gaining a control over the debt situation, you can repair your credit.

fix bad credit
fix bad credit

Improve credit record

Credit can be repaired in several ways.

  • It is important to check that the credit reports are accurate and without errors. It is important to check that credit reports reflect payment history and debts accurately.
  • If you set up payment reminders of paying bills on the time it will help you to repair credit. Paying bills on time has a large influence on the credit record. Not paying bills on time can result in poor credit record.
  • By controlling your credit card debt, you can improve your credit score. It is important to keep credit card usage under control.
  • You can avalanche the debt paying method. You should start off by paying off the debt with the largest interest rate.

How to handle poor credit

You can take several steps to repair the credit record.

  • You can contact the creditor and negotiate on the debt payment.
  • Another important way to repair credits is to consolidate debts. By consolidating debts, you can handle your credit situation by making a single payment.
  • It is important to ascertain that there are no inaccuracies in your credit record.
  • You can avail the services of credit repair companies who act as mediators who help in settling debts. They work with creditors directly and manage the debt situation.
  • You can contact professionals who offer credit repair services. With their experience and knowledge they can help you in to repair credit.

Signs of bad credit

To live in a situation of poor credit is extremely difficult. If you encounter certain situations, it indicates that your credit needs help. If a credit card company denies their service to you, it is a sign that you need to repair credit. Most utility services conduct credit checks before extending their services. If it is difficult for you to establish the service in your name it indicates that your credit record needs checking. At times, credit reports may stop you from procuring the job of your choice. Most employers check the credit history which forms an important part of the hiring process.

Vital steps

Certain essential steps can be taken to repair credit history. It is important to assess the financial situation. It helps you to know what you have to fix. You can contact a credit repair company which provides you with a credit report annually. It helps you to ascertain whether there are any inaccuracies in your credit report. If you are in such a situation where you owe more than the amount you can pay it is important that you negotiate on the payments. You can negotiate on partial payments of the debt.

You can improve your credit by consolidating credit cards. If you have a small amount of debt on cards with large limits this proves that you can handle your finances responsibly. Secured cards can help you mend your credit and take advantage of funds which are available. It is very essential that you pay all your bills on time. Credit repair companies can help you to improve your credit in a short period of time. As soon as your credit score is improved you will be entitled to a new set of loans and mortgages.

Author Bio: Henry decided to repair credit record after a home loan was denied to him. He consolidated the debts and applied for secured credit cards.

Credit 101: What You Need to Know

Credit isn’t just about getting a loan for a car or a home – it can also affect your ability to get a job. According to Consumer Affairs reporter Mark Huffman, debt has become the American way. People see spending as a patriotic duty to help the country recover from the Great Recession, as a way to express freedom and a way to prove independence.  But before you go whipping out a credit card for the sake of the country, consider Credit 101: What You Need to Know.

improve credit
improve credit

Types of Credit

Credit basically falls into one of two categories – Secured Credit or Unsecured Credit. Secured Credit is a loan that is given in exchange for collateral and credit worthiness. Auto loans, mortgages and pawns are all types of secured loans. Typically, the interest rates for secured loans are lower than for unsecured loans. Unsecured loans are loans given based on your credit history and future predictions. These include credit cards, signature and personal loans.

Credit Score

Your credit score is a reflection of up to 5 factors, according to My FICO. But not all factors are weighted equally. Payments owed have a weight of 35%, amounts owed comprise 30%, length of credit history rates 15%, new credit is 10% and types of credit used are the final 10%.

Payment history looks at whether you’ve paid previous and current accounts on time.

Amounts owed is the total of the debts you owe. Having multiple credit accounts with balances does not necessarily mean you’ll have a low credit score.

Length of credit history refers to how long you have had credit accounts established, age of oldest and newest accounts along with average age of accounts, and how long it has been since you used these accounts.

The mix of credit accounts you have open is your types of credit in use. This can include credit cards, retail credit, mortgages, and installment loans such as auto or signature loans.

Finally, new credit is the amount of new credit you’re asking for or taking on. Requesting multiple credit accounts at once – such as activating a few new credit cards – is a negative for your credit score, especially if you don’t have a long credit history already established.

Living Within Your Means

One of the hardest things to do these days is to live within your means. People earning minimum wage don’t earn a living wage and come up with other ways to provide for their families. Many consider a home with a picket fence a sign of achieving the American Dream and borrow more than they are able to afford simply because they can. states that the average American has more than $3,700 in credit card debt. Household debt is 67% of the GDP (Washington Post).

Credit Counseling

If you’re in debt over your head, consider credit counseling, either on its own or as a precursor to Chapter 7 or 13 Bankruptcy. That’s right. In order to file consumer bankruptcy under Chapter 7 or Chapter 13, you have to receive credit counseling from an approved nonprofit credit counseling agency within the 180-day period before you file. If you’re considering bankruptcy, be sure to contact a reputable attorney that specializes in bankruptcy and other financial matters.

How to Write Credit Repair Letters

You are not going to feel any fun by having a bad credit score in your credit report. Nevertheless, it is fortunate enough that there is something you are able to do in order to change the credit status. Anyway, nobody would wish to spend hundreds or thousands of dollars for a credit repair service to fix their credit report for them. So, you know what, you can choose not to pay any money to anyone as it’s actually something you could just carry out by yourself. The matter of fact is , repair the credit score by yourself is something heavily recommended by the United States government. You can refer to the website at for more information.

credit repair agency
credit repair agency

Don’t Worry Too Much

Anyone can fix their own credit score as long as they have an internet connection. First of all, you need to get a copy of your credit report and thoroughly checking on it to identify is there any negative item is wrongly stated in the report(and you will getting shock on just how many incorrect negative items that you can observe on your credit report which causing your score drawing down). I do understand that you may found a credit report is very hard to read. However, if you can’t read it by yourself, simply consult your loan officer to get some help. Since it is his/her job for reading credit reports all the time and should certainly manage to assist you to comprehend it quite quickly.

After consulting and you have figured out which negative items you want to dispute, then what you need to do is to write the dispute letters. If you are connecting on the internet, you can find a lot of dispute letter templates available to help you to write your credit dispute letters. Most of these templates are written in good format and you are able to customized them easily to the dispute details that you want them to be. If you don’t want to use any of these templates, the FTC itself has some good dispute letter samples that you can use as well.

What’s Next After Completing Your Letter

Once you finish with your dispute letter, the next thing that you want to do for your self-help process of fixing your credit score is you just sign the letters, stamp them, and send out those dispute letters. You are done! See, the process is not difficult actually. You shouldn’t be misled with the unidentified terms and conditions found in credit reports. This is simply not a field that’s just for so-called professionals anymore. You can also seeking help from your friends and family in getting more understanding on the terms that you not really familiar with. Never ever let them stop you and scare you away. You should empower yourself and be persistent to repair your credit score. You are the one who respond for yourself and take full control of your own financial freedom. So, just get up and jump-start it by helping yourself to fix your credit score right here and right away.

What You Need to Know On Credit Repair Services

Credit Repair Services

Do you know about credit repair services? For most of the credit card companies they do use a stringent approach to keep their customer records. Most of them maintain all transactions made by the credit card holders in a universal record and revise a report that relates to the credit status of the credit card holder. At the time a consumer open a bank account or getting a credit card, they are going to be provided an account that contained their transaction details. This certain account is kept and holds the important occurrences of your life.

In case you are having bad credit history right now, it can be unwise for you to giving up to preserve a favorable credit report which could result in many further troubles in your life. At the time you would like to apply for a small loan for car or home, you will find there is no creditor out there really want to offer you any loan due to you have a non-impressive credit profile. Even at the end you managed to get a loan, you will expect the interest rate that you need to pay for that loan will be very high.

For that reason it’s suggested that a person need to work on fixing the credit report. Needless to say that it is actually quite easy to manage this process. The whole process doesn’t consist of complicated turnouts and you are able to take up this pain as long as you’re cautious. You now should get ready yourself for knowing about some facts prior to taking any action to repair your credit issues.

Credit Repair Services Steps Taken

credit repair services

1. The consumer have the opportunity to take control of the debts produced by this insufficient cash flow. You need to understand the specific fundamental requirements regarding these types of projects which involve a substantial amount of money.

2. By simply following the actions shown by the agency of some services entail stringent credit cards management. You’re going to be educated how you can make use of the plastic money power as well as how to take advantage of the loopholes.

3. Once you managed to improve your credit score, your credit report will become better and you are going to get a better treatment when come to loan application. The agencies of collection won’t bother you and ask for payments.

4. There will not be a problem if you applying for small loans. You will have the negotiating power when dealing with other banks to get yourself a lower interest rate for your loan. You will expect the creditors to give you the loans that you apply for and you’ll even have the options to choose for the loan that best meet you requirement.

Receiving Good Credit Repair Services

There are a lot of consumers do now realize in which they can actually use the credit report as a tool to get rid of bad credit. By doing so, you may even see your credit score raise as high as 200 points. If you view through your credit report carefully, you can discovered many negative items which are disputable and may also be eliminated legitimately. Therefore, always check your credit report carefully and choose the right credit repair services in order to take the necessary action to boost your credit rating.

Four Tools To Turn Bad Credit Into Home Ownership

The aftermath of the recent financial crisis has put an extraordinary amount of homes on the market at incredible discounts. However, too many consumers cannot take advantage of these prices because of poor credit scores. Take advantage of the free resources listed below to improve your credit score and move into your dream home!

License: Royalty Free or iStock source

Before you can begin to work on improving anything, it is crucial to understand your current position. The United States Fair Credit Reporting Act (FCRA) has made this easy by requiring each of the three major credit reporting agencies to provide consumers with a free copy of their credit report once per year. is only source for these free reports, and the ideal starting point for improving your credit. The report will clearly identify items that increase and decrease your credit score, allowing you to plan for improvement.

License: Creative Commons image source

You now know that you need to improve your credit, but how is that possible with so many bills, bank accounts, credit cards and loans? is an excellent, free tool for consolidating all of your financial activity. It allows you to see all of your incoming and outgoing payments conveniently, in browser or application format. The service also monitors your transactions to track spending by categories including loans, utilities, restaurants and user-created categories. Categorizing transactions makes it easy to set specific budgets and monitor spending. It will even alert you to unusual spending to remind you of your goals, or to alert you of potential fraud. Leverage these capabilities to identify savings opportunities that can be used for a down payment. Setting a reasonable budget for savings will give you something to work toward and show you how quickly you can achieve your goals.

License: Creative Commons image source

Zillow is a great real estate tool that provides data on millions of residential and commercial properties in the United States. Find your dream home by searching based on location, price, size and more. The service allows you to see foreclosures, new construction and everything in between. The site also provides a wealth of information to leverage in analyzing your purchase, including recent sales, market trends, estimated mortgage payments and more. The service also allows you to track homes you are interested in, and can alert you via notification in the mobile application or through email.

License: Creative Commons image source

The final, and most exciting, part of your journey to home ownership is being approved for the mortgage that enables you to buy that dream home. is a great, online resource that provides mortgage information, calculators and rate comparisons. Search through the consumer guides to find useful information regarding discounts for select groups of borrowers such as veterans and seniors. Target your home search based on target states or areas with the lowest mortgage rates. Input property value, credit score and down payment to calculate a reasonable interest rate and make sure you get the lowest possible rate. Regardless of your financing needs, is a quick and easy way to gather valuable information.

Knowledge is power, especially in markets as volatile and competitive as the real estate and credit markets. Acquire as much knowledge as possible using these valuable tools in order to understand and improve your credit and the purchase best home available.

This guest post has been contributed by Jenny Wadlow, who is a freelance blogger. She is very passionate about art and music. Recently, she wrote an article about bad credit home loans for Loan Saver Network. Log on to for her opinions on financial matters.

How To Improve Your Credit Score

Credit scores are all important when it comes to receiving a credit card and without a good one you’ll find it harder to get credit with a low interest rate or even at all. However, improving credit can also be achieved quite easily and with a little time and effort – so, what’s the best way to do so?

credit score
credit score


Of course, you won’t know what to expect until you go and get a credit report and take a look at the situation you are in. Credit reports show you not only your score, but also what has hurt your credit in the past. Getting a copy is a good idea and looking through it with a fine tooth comb a better one. If there are any errors on the credit score you can then dispute them and have them erased from it. This can make all the difference to your score overall and the interest rates or credit you are offered.

Credit Utilisation

The credit utilisation rate is a ratio between the amount of credit you have available and the amount you use. Needless to say having a low credit use to available ratio looks better to credit companies and makes you look like you aren’t as hungry for debt as you could be. Ideally you should pay cash for purchases rather than put them on your card, so as to keep this ratio low.

Due Balance

Payment history is around 35% of credit scores and the further behind you fall the worse your score will be. So, catch up on your payment and then you won’t have nearly as much to worry about. If you have missed payments or can’t pay on time, talk to your credit card company, they may try and help you out in some way or another. Many have certain programs put in place to help you repay without crippling you.


If your score is poor, one of the worst things you can do is to try and apply for new credit cards or any form of credit. Applying for more than two in a space of a month of so will make it look like you are desperate for credit and in turn mean you end up in trouble in score terms. Avoid doing this.

Use Suitable Credit

If you have bad credit, there are a number of ways to still get credit and these can be used to help build up your credit reputation. Secured bad credit loans and high credit interest cards can provide you with a solution in this case and provide you with credit if you need it. By being responsible and repaying the balance of this credit quickly and reliably you will improve your score.

Pay off Debt

Paying off money helps improve credit situations. If you have a credit card or a loan, repaying the minimum may seem tempting, but you are still increasing your rate of credit. However, by paying off the principal you will improve your situation and gain financial freedom. In time this will work to your benefit.

Improving your credit score is very important and can make life a lot easier for you financially and in other ways too.

Cormac Reynolds has written a variety of financial articles for a number of clients and takes a personal interest in money. He writes this article for

How to Repair Your Credit After Identity Theft

Being a victim of identity theft is a nightmare for most. You can start receiving debt collection calls for the debts that were gained by the thief. While putting measures in place beforehand is great, it does not always prevent it from happening. So if you find yourself a victim of identity theft what do you do now that your credit is in trouble? There are a few things that traveler’s guide to preventing identity theft can help you with. Guest door offers great solutions for before and after identity theft has happened.

If you want to find out what you do know here are a few wonderful tips on how to get started fixing your credit.

File a police report

This is where you need to start. The moment you realize that there is a problem you need to file a report. Many of your lenders and creditors will want to have a copy of this for their records. Those that they person might have opened under your name will want a copy as well. This is the first step into getting your life back after identity theft. Talk with a detective or officer about what all you will need to file this report.

Put a fraud alert in place

When you are working with the police for your company, you need to activate an alert on your social name mentioning that the fraud has taken place. This will help to prevent any fraud from happening in future. You need to have an alert placed on your account to ensure that if anyone is trying to give you credit, he has to go through the process assuring that it is you who is working with the account. This is done by getting in touch with all three credit bureaus and explaining them your situation.

Call your credit card companies

You need to contact your lenders right away when you notice fraud has taken place. This helps them get your account on alert and make sure that you do not have any other issues. If you let the companies know your card has been stolen or is missing they can put a stop to the card at once. Sometimes they will refund fraudulent charges right away and other times they may need proof from the police department to refund. This is where your police report comes in handy. It is important you call them to let them know what is going on as soon as possible. This will prevent any further charges from happening.

identity theft

Keep close tabs on your credit report

Be sure to monitor closely your credit report and account statuses. This will help you to make sure that no other fraudulent charges or accounts are appearing. It also lets you know how this has affected your credit report. You want to monitor for a length of time afterwards to make sure that everything has shown up. If other items do show up you will be able to report them. Monitor it for at least a year after it happened to be on the safe side.

By keeping these tips close by you can be prepared to repair your credit should you become a victim of identity theft. You never know when or where it can happen but it causes a pile of hard work for all involved. Be sure to take measures like safeguarding your information, keeping tabs on all of your accounts and regularly checking your credit report. Keep these tips in mind if you have a problem with your identity being stolen. You will be glad you had this information if it happens to you. If it does, relax and know that you can take steps such as these to fix the damage done.

Author Bio:
Ashley is a professional writer, whose passion is to write blogs on finance and security. Her awesome tips and guide helps her readers to manage their financial security. If you are still curious on what more steps to take in preventing identity theft, you can visit GuestDoor. You can also visit to know more onTraveler’s Guide to Preventing Identity Theft.

How To Start To Repair Bad Credit

Repair Bad Credit

If you are having bad credit at the moment, you should try to repair bad credit as soon as possible. Cause when you want to apply for mortgage loan, having a good credit score will be an outrageous advantage for you. For that matter, it can be very important that even a lot of financial experts would recommend you to only applying for mortgage loan should you have good credit score. Mortgage lenders will definitely take into consideration of your credit score as a vital indication of your risk level whether you are capable in repaying the loan. For most mortgage lenders, they will assume that consumers with a credit score of 500 are most likely not going to repay their loan on time compare to consumers with credit score of 700.

What You Can Do To Repair Bad Credit

Fortunate, there are some steps that you can take in order to repair your credit score if you are right now having a bad credit score. However, the first thing that you need to do is ensure the accuracy of your credit score. You will getting shocked to know that fact that estimated about 25% of credit reports are contain with severe errors. You will expect to take six months to a year to identify and correct the errors which definitely is not good at all when you are in need to get a mortgage loan. And also the rate of interest on the loan that you applied could be negatively impacted by just a minor mistake on the credit report. To avoid such error happen in your report, you should check your credit report frequently.

A lot of financial experts might also let you know that it’s a wise decision to contact all your creditors to lower the balance of available credit, due to the fact that mortgage lenders will think your total available credit are of relevant, despite the fact that you are not owe that total amount. An additional action would be to cut down the number of your open accounts or credit cards. You should do so in writing and let the 3 big credit reporting agencies which are Experian, TransUnion and Equifax know about the closures.

repair bad credit

Nevertheless, you need to identify on which accounts you should close when you want to close the accounts. The factor of the duration of your credit history has an effect on getting a mortgage loan. In case you been using a specific credit card for a couple of years and always pay on time on that card without any default, then you should have that account remain open as the card is able to provides you a long credit history. The fact is a long and steady credit history will enable you to keep a good credit score. And it can be an advantage for you by make sure that you simply are going to have better choices at the time you are applying for a mortgage loan.

Repair Bad Credit – DTI Ratio

The debt-to-income(DTI) ratio will be another essential item to consider with regards to granting you for a mortgage loan. If at all possible, this DTI ratio shouldn’t get over 30%, which mean your total amount of debt for each month shouldn’t be exceed 30% of your net monthly disposable income. Mortgage lenders often make use of this ratio besides looking on your credit score, even these two things can be of nothing related with each other. If you have a higher DTI ratio, then what you need to do is you need to focus on repaying off some of this debt as soon as possible. Those credit cards that carry the highest interest rate should put as priority which you should paying off the debt first. As soon as the debt are paid off, you need to immediate close down the account.

Your bills payment history as well as other payments that you make on time can be the one most significant variable having an influence on your credit rating. Preferably, get started in having to pay all your monthly bills on time. Even though it can be tolerable for you to once in a while making late payments, but those bills which are overdue for 30 days or more will be reported to the credit reporting agencies and will eventually have a negative effect on your credit score. Once you discover you will get delayed repaying a bill, speak to the creditor and nicely ask for a grace period. Make an effort to at least make the payments for the most critical bills on time such as mortgage loan, home equity, car loan and etc.

Among the most effective ways to make certain that your bills tend to be paid out before its due and eventually repair bad credit would be to register for auto-payment of bills. By doing so the electronically links your bank account to the bill payment system and deducts the money automatically from your bank account each month. Of course, you need to always make sure there are enough money in that bank account available for deductions. After this, you are going to save time and postage in the long run and will never experienced any late payments anymore.

You should now expect for at least one year to have your bad credit fixed. However, If you think that you really can’t make it, you are still able to find many debt consolidation loan programs that can help you. Signing up for this type of program may well negatively have an impact on your credit score. Should you want to buy a home and do not have the time to wait for a year to get your bad credit fixed, you are still can achieve your dream to be a homeowner but you will need to spend a lot of times and shopping around to find any lender who willing to approve you the loan that you are looking for.

A Simple Guide To How Credit Reporting Works

There are three credit reporting agencies (CRA) in the United States: Equifax, Experian and TransUnion. If you apply for loans of any kind, potential lenders obtain your credit report form the CRAs. At times, even potential employers may obtain your credit report. Here is a simple guide to how credit reporting works.

credit reporting
credit reporting

The beginning.

The first time you apply for any kind of credit or loan, whether for a credit card, mortgage, rental or revolving store account, a file is opened at the CRAs. It includes your name, birthdate, address and social security number. It includes your current and previous addresses and employers.

Type of information reported.

Companies report to the CRAs the following information concerning the type of credit they granted you.

  • Credit cards, including revolving store accounts.
  • Auto loans.
  • Rent payments.
  • Mortgage loans.
  • Loans that have been paid or are inactive.

Matters of public record are also reported, such as:

  • Any type of lien, including tax liens, that has been filed.
  • Court judgments.
  • Bankruptcy filings.
  • Unpaid child support.

For each loan, your creditors supply the CRAs with:

  • The date the loan was granted.
  • The amount of the loan if for a lump sum.
  • The credit limit for revolving credit cards.
  • Terms for repayment of the loan.
  • Interest rates on all loans, including credit cards.
  • The current balance of the loan.
  • Whether you have paid the loans according to the terms of the loan. This includes whether or not you have made your payments on time.
  • Whether or not any account has been turned over to a collection agency.
  • Any inquiries for your credit report are also noted.

How do the CRAs calculate my credit score?

Each CRA has its own method for mathematically computing the information reported to it and turning it into a number referred to as your “credit score.” They all consider the following factors, although they may each give a different weight to the individual factor.

  • The type of credit you have, whether mortgage or revolving credit cards.
  • The length of the loan. For example, the longer you have had a credit card and made timely payments, the better your credit will be. If you have recently taken out several credit cards, this may lower your credit score.
  • The total amount of money you owe.
  • Your payment history.

They all calculate a score between 300 and 850. It is the final number that is reported to the lender. The higher your score, the better credit risk you are and the more likely you are to get the loan you have applied for.

How does a lender use my credit report.

Lenders have different criteria for granting loans. Your credit score is only one factor they use in deciding whether or not to grant your credit request. The lender will also evaluate your current income in comparison to your overall debt. A recent history of timely payments may compensate for earlier years of credit problems.

If lenders consider your score low, they may still grant your credit request but charge a higher interest rate.

Reasons to check your own credit report.

You may not think you need to personally check your own credit report. In fact, experts recommend that you check it at least once a year for the following reasons.

  • Mistakes are made. Just one example is that information may be on your report that belongs to someone with a similar name. You can file a dispute with the CRA and ask them to fix it.
  • You may have paid a debt that was causing you to have a low score with the understanding that it would no longer be on your report. When you find it still there, you can contact the creditor and request them to remove it.
  • If you had a period of time when it was difficult to pay your bills on time due to illness or loss of a job, the CRA may allow you to write a letter of explanation that will be a permanent part of your credit report.