Every American strives to achieve a healthy credit score but sometimes the cost of living and piling monthly bills can add up and put a dent on your credit score. If you are trying to acquire a loan with average credit the process might be challenging but it’s not impossible.
Visit realisticloans.com and find out how you can get a quick cash loan even when you have bad credit.
What Does Having An Average Credit Score Mean?
Having a credit score that is just average could mean that your credit score is fair rather than good or excellent. If you live in America you’ve probably heard the term FICO score or even seen it on your credit card statement.
The FICO score is a credit score that is used by lenders to decide if you qualify to borrow money. The scores are divided into five tiers; a very poor credit score starts at 300-579 while an exceptional credit score ranges from 800-850.
Going by the FICO range, your average credit score would most likely be in the 580-669 range. This would mean that for you to get a loan, you would be required to pay a little more as compared to someone with exceptional credit. However, if you do your research and take measures to improve your credit score you can successfully get a loan in very favorable terms.
Here are the 6 steps to acquiring a loan with average credit.
- Why Do You Need a Loan?
The first thing you will need to do is determine what you need the money for. Remember, there are good reasons and bad reasons for taking out a loan, especially when you have average credit. A good reason would be to invest in real estate or buy new equipment while reasons include purchasing luxuries or financing a business with ongoing losses.
- Fix What You Can
The next thing that you will need to do is to get a copy of your credit report. Go through every detail carefully and if there is a mistake or error, dispute it right away and have it removed. Having the right information on your credit report can make a significant change to your credit score in a short time.
- Shop Around
Be sure to shop around for a lender before making the final decision. Look for low-interest rates and a good reputation. You can compare at least three different lenders and see which one has the best terms.
- What Are Their Interest Rates And Fees?
Interest rates and fees play a key role when applying for a loan. Remember, if you are applying for a personal loan with average credit, you could end up paying up to 36% interest rates and a fee for early repayment. Evaluate the fees and interest rates carefully. You can personally visit your lender and ask for clarification before making your commitment and signing on the dotted line.
- Prepare Your Loan Application Package
The next step will be to prepare your loan application paperwork. If you are applying for a business loan, you will be required to present a business plan and your resume. You will also need to show at least three years of your tax returns.
- Bring In a Cosigner
Getting a co-signer involves approaching a friend or family member who has good credit and asking them to share the responsibility of paying off the loan. Co-signing gives the lender an assurance that the loan will be paid in the event you are unable to.