If you’re worried that you may not qualify for a loan, whether it’s due to either bad credit or a lack of credit history – don’t worry, you are not alone.
If you have run up a few debts with store cards and credit cards and the like, it can be too easy to simply pay the minimum amount every month, so that you have more cash to live your life with.
Before you know it, you can run into hiccups along the way, and occasionally find yourself unable to make minimum payments. Over time this can drive down your credit score and affect your ability to apply for loans.
This will in turn affect your ability to pay for high ticket items, such as a deposit for a mortgage, or buying a car on finance. It can even affect your ability to get a job, since many employers look at a potential employee’s credit rating as a sign of their reliability and sense of responsibility.
But there is hope. Improving your credit score when you have bad credit can be done and it happens every day.
Most lenders consider credit scores below about 580 to be “bad credit” but there are lenders out there that will consider lending to those with such credit scores. For example, CreditNinja offers loans for bad credit.
And as a result of receiving a bad credit loan, you will then have the opportunity to work on your credit score and bring it further up, making you more likely to be offered loans in the future.
The Key To Qualifying For Bad Credit Loans
If your credit score is around 580, you can still qualify for a bad credit loan. And the key to qualifying is being able to prove that you can make the monthly payments.
And this is as simple as printing off your bank statements in order to demonstrate sufficient income. This is how your ability to pay off a loan is determined.
This is something that every lender will ask for and is non-negotiable. The only way in which this may differ between lenders is how far back the bank statements need to go.
Admittedly, this may not be enough for some lenders, and they may look into your credit history as well, especially if you are applying for a large amount, or if you want to pay it off over a short period.
You will also need to present identification. You may also be asked to provide other documents such as pay slips from your employer/s.
Providing Bank Statements To Qualify For A Bad Credit Loan
Before you apply for a bad credit loan, you should aim to get your finances in order as best you can. This may mean looking for better deals from utility companies, and doing your utmost to live within your means.
Your bank statements will be scrutinized, and ideally you will not be overdrawn. If you have agreed an overdraft with your bank however, then you must ensure that you are not at (or over) your overdraft limit.
You may also be asked what it is that you want the loan for. If you state that you want to use the loan to pay off any previously accumulated debts, then this will go in your favor, as it is a sign that you are taking control of the situation and are on your way up. Paying for luxury items may be looked on less favourably.
Before you apply for a bad credit loan, look at your total monthly income and your outgoings and work out how much you can comfortably afford to pay back every month.
Remember, you must ensure that the loan that you apply for is one that you can easily afford to pay back. If you don’t do this, you risk everything turning south very quickly and instead of improving your credit score you could end up driving it back down again.
Wrap Up
Different lenders have different requirements for citizens applying for bad credit loans, but they will all ask for proof of income, and they will usually request it in the form of bank statements. The power to turn things around is in your hands.
