It may seem counterintuitive that you would take out personal loans to repair your credit. However, this can improve your credit score if it is handled well. The credit score is calculated using five factors with each having a different weight. This information will help you decide what loans you are able to afford.
Car loans
You must make timely payments on your auto loans if you want to improve your credit score. Paying late will only make your credit worse. Fortunately, it is possible to find decent car loans for rebuilding credit. A car loan with bad credit can be hard to get a decent interest-rate. But, it's possible if you have good credit and a track record of paying your bills.
Lower credit scores are more likely to be charged higher interest rates. It's worth shopping around for the best deals. You can also postpone buying a car until your credit rating improves and you are eligible for a better rate.
Installment loans
Installment loans can help you improve your credit score. However, it is important to make payments on time. The credit bureaus report every payment you make to these loans, which can help boost your credit score. Be aware that late payments may cause credit score to drop. You will need to find another source of credit if you are unable to make your monthly payments.
Many lenders will require a minimum credit score before granting an installment loan. These are because those with higher credit scores have a better chance to repay the loan. But, some lenders will consider your income annually when determining the interest rate.
Payday Loans
Payday loans are great for short term emergencies. Payday loans can come with a high interest rate, and they require repayment within two weeks. These loans aren't for the faint of heart. In fact, they can cause more damage than you might expect to your credit score and could even cost you more.
Although payday loans are quick and easy to get, they can be very difficult to repay. It is not a good idea to make large monthly payments on these loans. Instead, consider an installment loan which requires regular payments for a fixed period of time. These loans are for people with bad credit to make their monthly payment more affordable and predictable.
Co-signers on installment loans
You can get an installment loan with cosigners if you are rebuilding your credit or need money to buy a house or a car. However, it is important to remember that defaulting on an installment loan will lower your credit score. Lenders will be less likely to offer you the best terms because they view your credit history and risk. They might repossess your collateral.
It is possible to get an installment loan without a cosigner. Most people who need a loan will ask a close family member or friend to sign on it. However, this commitment can be long-term and can damage a relationship. It's therefore a good idea learn about other loan options.
Fairstone personal Loans
Fairstone can help you rebuild credit if your credit rating is poor. They offer personal loans, both unsecured or secured, and have more branches than 240 across Canada. A personal loan application is very simple. You can use your financial information, credit score, and other financial information to see if you are eligible for a loan.
While the application process may be lengthy, you can still complete it online. Emails can be used to send information and documents. While the application process is a bit lengthy, it is quicker than many other lenders. Fairstone has not posted many reviews of their personal loans online so it is difficult to evaluate the company's customer support.