The truth of the matter is there are a lot of options for people with bad credit or bad credit reputations. But they must bear in mind that there’s a penalty that awaits those who will ignore their bad credit. For one, you will be paying higher interest rates when compared with someone considered to be a good payer.
But like I said early on if you successfully repay the loans you have taken, and regularly keep up with the commitment to pay your debts, your credit score shall improve and the cost for borrowing shall eventually drop.
Check out where to find debit relief when you need them the most:
- You may start at your bank. If you’ve previously opened a checking or savings account, then it is pretty obvious you used to have a relationship with the bank.
- If a bank gives you a personal loan, then you and your bank are on the same page.
- You can apply as a member of a credit union. Their nonprofit status gives you an advantage. Just follow their membership rules, loan standards, interest rates, and other fees and you’ll be in good hands.
- You can ask a friend or a relative for a loan. Most Filipino families would do this as their last resort. If you ask me, this could be both: best and worst choice. While it is very convenient to loan money from a relative, you have to be responsible enough to pay your dues in time. If you won’t, be ready for a family squabble. If you don’t pay them at all, then the family ties might be cut and it won’t do you any good. The same thing applies to friends. Be responsible and do this with a business-like approach. It should all be a win-win situation for both parties involved.
- Try debt consolidation loans. Both credit unions and banks would give you a one-time chance to pay off your credit card debts, be sure to do so that you can maintain a lower interest rate. You have to make sure that the interest rate is lower than what you need to pay on a current statement, otherwise, it’ll only put you in deeper debt.
- Home equity loan. If you have acquired a home, you could borrow against the equity you have in it. There are many low-interest loans simply because the house serves as collateral. Use it to your advantage.
- Debt Management Program. If you want to cut your credit card debt, the best way to do is to place your debts in a good debt management program. It will reduce your interest rates while they lower your monthly payment rates in various terms: it could be 36 months, 24 months, 12 months, and 6 months. It will help you pay off your loans in long-term staggered payment.
- Credit Card Loans. If there’s an emergency you need to attend to, but you know you have the ability to pay it quickly, using your credit card is your best bet. There are offers for you to pay at 0 percent interest that can be a big help.
- Make on-time payments. Never forget your payment dues because they tend to have higher interest for each delayed payment.
- Keep your credit card balances low. Use those plastic credit cards only when you need them. And pay up the balances regularly.
- Learn to clean up your credit. Nobody wants to become ‘blacklisted’ for credit card applications etc. You can ask for help with collecting agencies and write a debt dispute letter and explain to them the amount you can pay them.
- Bear in mind the negative impact it can bring you if you don’t pay your debts. The information shall be less damaging if you keep your credit obligations in good standing. On-time payment is the key to getting rid of bad credit labels for good.