When you apply for any loan, the lender will check your credit report. If your credit score is low or you do not have any, there is a huge chance that your loan application will be rejected. Read on to learn the implications of low credit score and no credit score.
Similarities between the Two
Bad credit and no credit mean that you do not meet an important criterion to be considered for a loan. When a lender receives your loan application, he checks your credit score first. The lender would like to see a good credit score, which will give him confidence to lend you the money. A person with a bad credit score means they is not trustworthy and may not be able to repay in a timely manner.
Similarly, a person with no credit score means he/she has no account of the money they owe. It may make a lender apprehensive of approving a loan application, as he does not know in how much debt the borrower may already be.
Differences between Both
Bad credit means you have a credit history that is blemished with missed and late payments. It makes you a borrower, who does not manage their debts responsibly.
On the other hand, no credit means you do not have any credit history or you have debts from informal sources like friends and family members. The lender will not have any idea about how you manage your debts.
Solutions for both
For a bad credit score, you need to start taking steps that will help you build up your credit score. Make timely repayments on your debts. Cut down on unnecessary expenses and focus on saving and paying off your debts.
Do not apply for too many credits in short time. Check your credit profile and if there are any errors, get them corrected. For no credit score, take a small loan and repay on time.
Start using credit card for purchases. Remember to repay your dues on time without fail. It is how you can build a credit report and get a credit score based on it.
WARNING: If You don't do something about your financial situation soon, it could get much, much worse!
So! If you need more information or require loan options with No Credit or Bad Credit then www.installmentloans.com.au allows you to approach perfect online loan lenders.
