Being strapped for cash is something we’re all too familiar with. Living from paycheck to paycheck is a norm in most parts of the world. And the same is true here in the continental U.S. American individuals and families push through by being able to budget what they have and live comfortably.
Still, there are times when uncontrollable financial emergencies come our way.Between now and your next salary day, you might find yourself in a bind with unschedule budget fluctuations. The next step? To take out a loan and be alleviated from this temporary income speed bump.
You’ve experienced going for bank loans but are already nervous about your bad credit and how it will affect your loan application. Or that bank processes are generally tedious, they take too much time when your financial need is urgent.
Find out about why payday loans are a reliable financial aid and click here for bad credit payday loans online.
What You Need To Know About Bad Credit
This is where the ruckus began in your financial upheaval, so, this is where we’ll start. Let’s take a closer look at what defines bad credit and what causes it.
A person’s financial history falls under this unfortunate category when records of delayed payment obligations, whether utilities or loans and the like are logged.
Not paying your dues on time and/ or owing debts that you fail to repay regularly are examples that are all too commonplace in at least more than 180 million Americans (and counting) this day. This shouldn’t have to concern you as long as you’re already formulating a budgeting strategy to ensure that your debts are recompensed and your slate is made clean of them.
However, the problem can be a bit more severe when a continual habit of remunerating for debts is delayed, so much so that they lead to complete failure of payment as time goes by. The other problem about this is that when you’ll suddenly be faced with the need to take out a loan because of some unforeseeable financial challenge in the future, you won’t be able apply for a bank loan because of bad credit. Well, all these could happen if you don’t have an emergency fund that you can use in times of financial needs.
What Is A Bad Credit Score?
According to FICO (Fair, Isaac, And Company), a measure of consumer credit across the United States (you might have also heard about FICO scores), credit scores that hit 699 and below are considered “fair” to “very poor”. Then again, regardless of which section a borrower belongs to, he or she will be tagged as having a bad credit score all the same. Another jargon used for this term is “subprime”.
Think of a bad credit score as the overall ranking of your credit history from the first time you signed up for a credit card and/ or a loan until today. This numerical assessment will immediately give lenders a heads-up of the likelihood that your income is enough to pay for a loan or not.
Why Does My Credit Score Matter? Factors That Affect Credit Score
Transaction History
Your bill-allotment for utilities, credit cards, loans, insurances, you name it— these, combined altogether, make up what’s recorded in your payment history. The simple explanation of how it affects your credit score is that when your payments are consistently on-time, then you are granted a good credit score. In contrast, late outlaying for said bills will garner you a bad credit score.
Credit scores are usually computed at least once every 45 days, although this may vary per financial institution. What you should know is that a bad credit score will stay on your record for as little as seven years. For you to clear it, it will take you that long, plus keeping your current bills and loan repayments punctual, and not taking out a loan in that duration.
Amount Of Debts
The second factor which affects your credit score is the amount of each loan listed under your name. There isn’t a fixed answer here. It might not be safe to think that a small loan will garner you a higher score if you’ve had late payments for it. The same is true for larger debts. Having a number of them and still incurring late fees isn’t a good sign as well.
Bad credit scores and bad credit history add up to what will make or break your application towards loans. And in case you get through to central and/ or commercial banks (though they’re almost always very strict about referring to credit history for qualification), the exchange is that you could be subjected to higher interest rates.
The Solution: Online Payday Loans For Bad Credit
Payday loans are short-term loans that you can quickly apply for and just as quickly, if not quicker, receive. They’re what you would imagine as stand-ins for your financial gap between this moment and your next salary pay out.
These are short-term in the sense that they generally have shorter repayment plans. Having said that, lenders are flexible regarding repayment conditions. Which means that you can have your lender offer a number of plans wherein you can make comfortable repayments realistically, and according to your regular income.
Payday Loans FAQs
There are about 12 million Americans who sign up for payday loans annually, and this number continues to grow. This is because payday loans are among the most convenient to apply for and aren’t necessarily heavy on repayment terms.
Even better, they’re so accessible. There are numerous online payday loan platforms that you can get in touch with via the internet. That’s all you’ll need. A good internet connection and you can browse through payday loans, and other types of online loans for bad credit effortlessly. With regards to selecting a loan that can be easily acquired, this is it.
In addition to these facts, a misconception many tend to believe about payday loans for bad credit is that lenders will never check borrowers’ credit history. We’ll say it now that this is false. There are several lenders, even those who offer such loans, who still go through that route. But there are also a number of them who don’t. And as for the first, it’s frequently done as a “backup”, if we may call it that, along with the simpler qualifying requirements.
What are these “simpler” qualifying requirements? That you’re over the age of 18, are a resident here in the U.S., and can provide proof of regular employment. After that, the process itself is smooth. It won’t take long before the loan is transferred to your account and you’ll finally have that boost to get you and your family through this momentary financial difficulty.