If you are planning to apply for a personal loan or a different financial product, you have probably heard about credit scores. But what are they? Where do they come from? A number of factors make up a credit score including:
- Your payment history
- Your debts
- Your credit history length
- The new credit you have applied for
- The types of credit you use
The full range of FICO credit scores is 300 to 850. A fair credit score is anything between 620 and 680. If your credit score is in this range, it may be because you have a short credit history. It could also be because you paid some of your bills late or you have defaulted on a loan in the past. Also, having a lot of debt can drive down your score.
Credit Options for Those with Fair Credit
When you have a high credit score, lenders view you as less of a risk of not paying off a loan. The opposite true as well – banks and creditors see lower scores as a larger risk. Sometimes, it can be hard to get loans if you have fair credit, but it can be possible. For some loan offers that you may receive, the interest rates will be much higher than if you had an excellent credit or even a good credit score.
Sample Interest Rates
Interest rates at LoanStart.com start at 4.84 percent. Applicants with fair or poor credit scores could receive an APR as high as 35.99 percent. The exact rate you receive will vary depending on the lender’s calculation method. Also, the terms of the loan, the loan’s fees, and renewal options can affect the APR.
With a Fair credit score, a personal loan may be an option. However, some lenders may ask for collateral. If buying a car or making another large purchase, a larger down payment will be required. LoanStart works with a number of lenders and lender partners willing to work with those with fair credit.
Raising your Credit Score
If you have a fair credit score but wish it was good, there are a few simple strategies to boost it. The factors that affect your credit score are the same ones you should focus on when trying to raise your credit score.
- If you have trouble paying bills on time, make it your goal to pay all bills before they are due.
- Pay off outstanding debts, especially credit cards. Once they are paid off, keep your debt low.
- Even you find yourself in need of cash, be particular when choosing credit cards or short-term loans.
- Only apply for credit if you need it. When you apply for new credit, hard credit inquiries show up on your credit report and can lower your score.
If you find it difficult to do all the above on your own, credit counseling could be a good investment. Some business or non-profits may even offer free or low-cost credit counseling for people with fair credit.
Checking Your Credit Score
Every American is entitled to one free annual credit report from the three nationwide credit reporting agencies – Equifax, Experian, and TransUnion. Requesting these free reports is simple. Visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form to get your free annual reports as mandated by the FCRA (Fair Credit Reporting Act).
The reports contain details about a person’s bill-paying habits, their area of residence, and if they have filed for bankruptcy or have been sued. Some people spread their free annual reports out over the course of the year. This way, they receive three separate reports annually.
Credit Monitoring Services
For $10 to $15 a month, a subscription-based credit monitoring service allows you to keep track of your credit score on an ongoing basis. These services monitor your score at one, two, or all three major credit agencies.
There are both advantages and disadvantages to using these services. One advantage is that you get regular updates on your credit score and activities. This lets you stay on top of your credit activities. You will also be notified of any suspected fraud or errors.
On the other hand, these services do have some disadvantages. Although they alert you to theft or fraud, they won’t prevent them. If a person uses your name or SSN to open accounts, the credit monitoring service might notify you, but not until after some of the damage is done.
Another risk you should look out for is signing up with a credit monitoring service that charges too much. There are some companies out there that will charge you upwards of $40 a month to monitor your credit, while not offering you any additional benefits compared to the companies charging a fraction of that price. Be wary of these businesses.
Request a Loan Through LoanStart
Are you short on funds? Do you need cash? You can request a personal loan today, and we will do our best to connect you with an affiliate lender or lending partner. Our partners extend credit and make loans to many different types of borrowers with a range of credit scores. By using our free loan connection service, you can try to find a lender to deliver the cash that you need. Request your funding today!