The country’s still-sluggish economy has changed the way lenders operate. Banks and mortgage lenders, even auto lenders, are more cautious about to whom they lend money. This makes life difficult for those consumers seeking personal loans for bad credit customers. The simple truth? A growing number of banks and lenders are no longer passing out personal bank loans to consumers with weak credit scores.
Three-digit credit scores have always been important for consumers looking to borrow money. Lenders passing out everything from home equity loans to second mortgages to car loans have long relied on these numbers to determine who is and is not a risky borrower. Those consumers with low credit scores have always had to pay higher interest rates to borrow money, and they’ve always struggled to qualify for the best loan products.
Today, though, lenders who were burned by the bad economy – too many of the loans they passed out to credit-challenged consumers have gone bad – have sworn off no credit check personal loans. This means that consumers with low credit scores who need personal loans to pay off their higher-interest-rate debt, finance a home-improvement project, or pay for a medical emergency might find themselves with no way to get at the money they so desperately need.
Consumers have long known how to get a personal loan: They know they have to submit to credit checks, and they know they have to prove to their bank or lender that they have the financial wherewithal to pay back their loans on time.
However, today, qualifying for personal bank loans have become even more of a challenge. Banks today don’t just want to work with customers with solid credit scores. They want to work with borrowers with top-notch scores. This means that consumers who are seeking personal loans should have a three-digit credit score of at least 720 on the popular FICO credit-scoring system.
For many consumers, this is no easy task. Nabbing such a high score remains a real challenge. Consumers who’ve missed credit-card payments in the past, run up large amounts of revolving debt, or had to file for bankruptcy protection will certainly have credit scores far lower than 720.
These consumers will find that the days of easy personal loans for bad credit are long gone.
Instead of seeking out lenders that will loan them bad-credit personal loans – which will come with exorbitant interest rates – consumers should, instead, strive to improve their weak credit scores. If they take the simple steps necessary to boost their credit, these consumers won’t have to worry about finding lenders that pass out no credit check personal loans.
Fortunately, credit repair is a simple task: Consumers need only pay their bills on time every month and do whatever they can to reduce their credit card debt. Once they do this, they can watch their credit scores steadily rise. Once this happens, consumers can confidently apply for personal loans with the banker or lender of their choice.