When money is needed urgently, you have to look for an opportunity to borrow it. The trouble is that the bank in California is unlikely to be able to do this quickly. This is how their work is arranged – thorough credit checks, a lot of documents, all kinds of information. The matter becomes more complicated if there is a bad experience of cooperation in the past (for example, delays in loan payments).
But don’t be in a hurry to despair. It is quite possible to get a loan with a bad credit history. What needs to be done for this? We will tell you in this article.
What is credit history?
Information about the borrower is formed and updated constantly from the moment a person becomes a client of a financial institution. Credit history reflects all the nuances of cooperation. Typically, as soon as any bank receives an application, they check your credit to inquire about your past experience with credit institutions.
The credit history is considered bad if there have been overdue loans, enforcement, fines. If all loans have been repaid on time, then the bank will consider the applicant trustworthy. But even one or two late payments can send a person to the black list.
What if the bank declines your loan? Do not worry! Loans to people with unsuccessful past loan experience are provided by microfinance institutions from our network of reliable US lenders. The work of microfinance institutions is structured in such a way as to insure against problems with loans – the terms and conditions are clearly negotiated even before you sign the agreement. The borrower independently chooses the amount and the payment schedule.
Why do you need a credit history?
It is believed that credit history is needed only when contacting a bank or a microfinance institution. In reality, the request to the credit bureau demonstrates the degree of the borrower’s responsibility and the absence of possible problems in the future, for example, when hiring in government agencies. Such requests are made to minimize possible corruption risks. In some cases, having a loan commitment can be an advantage. For example, a potential employee with a mortgage is inclined towards stable work and is committed to long-term cooperation.
The insurance company may request a credit history to calculate the possible financial losses when taking out insurance for a specific user. Irresponsible attitude to loan payments may indicate possible accidents due to careless driving.
You will need a credit history when applying for a large loan or mortgage. For example, you are a young entrepreneur who has a great idea and business plan. The available money is not enough for business development and you have to go for a loan. The bank declines your loan applciation since you have no credit history and the company has doubts about the honesty of your intentions.
Increased scams with real estate and mortgage capital are forcing banks to be more careful about approving applications. In such cases, a good credit history confirms the seriousness of the borrower’s intentions and becomes a guarantee that he or she will pay off the mortgage loan.
How credit history differs from credit score
A personal credit score is an assessment of the reliability of each potential borrower. Scoring points are accrued on the basis of the credit history. Banks make the final lending decision on the basis of your credit score.
Initially, a credit score was assigned to companies and was a testament to their reliability as borrowers or depositors. Subsequently, individuals began to receive scores too. A personal credit score generally ranges from 300 to 850. The minimum value guarantees almost 100% loan rejection, while a high value usually guarantees a loan approval.
In February 2021, the average credit score in the USA was 698. For comparison, it can be noted that only 20% of loan applications were approved by banks to consumers with a score of fewer than 500 points.
A credit score can be influenced by the quality of credit history, the frequency of visits to banks or microfinance institutions, or lack of activity. The main problem with a credit score is the lack of specific criteria for issuing a loan. Each bank has its own requirements for potential borrowers. For example, some banks consider a family man with two children a preferable client, others, on the contrary, prefer to work with single persons.
There are many companies in the USA offering to improve their credit score for little money. In most cases, such organizations are not affiliated with the official credit bureaus. Only banks or borrowers have the right to send inquiries, and all records are corrected only if there are inconsistencies. Often, contacting such organizations even threatens the loss of personal data. This is how information is collected for further use in fraudulent schemes. For example, personal data can be used to create online wallets or try to take out a payday loan from a microfinance institution. Therefore, it is important to use only trusted loan referral services such as firstcal.net.
What can ruin your credit score?
It is known that credit history allows banks and microfinance institutions to assess the capabilities of their potential clients and check how responsibly they treat payments. Credit bureaus are engaged in keeping financial files. There are three major credit bureaus in the USA: Equifax, Experian, and TransUnion. All relevant information and blacklists are received by credit bureaus from credit institutions: banks, microfinance companies or credit cooperatives.
There are two types of credit history: bad and good. Bad credit history can be formed both for objective reasons and purely by chance. For example, the reasons for its damage can be::
- executed surety, in which the borrower violated the payment schedule;
- refusal of surety;
- providing forged documents when applying for an online loan;
- frequent refusal to provide credit funds by financial institutions;
- open delays in loan repayment;
- early loan repayment;
- long-term loan deferral. Of course, such a procedure will not necessarily affect your credit history – it all depends directly on the credit institution. They may not send negative data about this to the credit bureau;
- actions of credit fraudsters. The borrower’s personal data can be used by third parties who draw up a loan obligation without his/her knowledge;
- technical failure when entering data or mistakes by a bank employee.
How can bad credit affect the life of a borrower?
- You have higher chances of being declined for a loan;
- Bad credit will interfere with employment. Some large companies check the credit history of potential employees. The debtor may simply not be allowed to work with large amounts of money – there is a high likelihood of his/her temptation to steal funds to repay a loan;
- Bad credit will cause calls from collectors who will not deal with the creditor’s mistakes but will insist on the loan repayment in any way.
Today, credit history data is stored for six years. If you do not make any attempts to improve your credit history or correct mistakes, then for six years you will have to receive refusals and deprive yourself of the opportunity, for example, to get a mortgage or a car loan.
So, if you find errors in your credit history, we recommend that you take action immediately.
How to check your credit history
You have the right to request one free copy of your credit report every 12 months from each of the three major US credit bureaus: Equifax, TransUnion, and Experian. You can order it online from annualcreditreport.com or call 1-877-322-8228.
How to fix your credit
If it turns out that your credit history was damaged through your fault, you should not look for illegal ways to remove it but rather try to improve the credit history by using one or several ways suggested below:
- take out a payday loan from a microfinance organization. Many online lenders offer their clients special credit builder loans;
- get a credit card with a low credit limit. True, if a client has a very low credit score, it will be more difficult to find a bank that will agree to cooperate with such a borrower. Nevertheless, it is worth trying because it is quite possible to improve your credit history within a couple of years;
- make a deposit. Financial institutions are always better at treating those regular customers who have money. Therefore, most likely, they will make concessions and provide an opportunity to apply for a loan;
- get a consumer loan in a store for a product. Such loan obligations are provided more easily because the verification of the borrower’s data is not carried out so thoroughly;
- take out a small consumer loan at a bank, while providing collateral or guarantors.
Advantages of taking bad credit loans online
Microfinance organizations are a real salvation for those who urgently need money in California. Applications are reviewed around the clock and within the shortest possible time. You will know the lender’s decision in just 30 minutes.
Benefits of online bad credit loans:
- no paperwork;
- relaxed eligibility criteria;
- high approval rates;
- immediate lending decision;
- same-day funding;
- apply 24/7;
- affordable interest rates.
Fast loans are available to different categories of the population. They are taken by students, pensioners, people without a permanent place of work. In order to become an applicant, you must be of legal age and have US citizenship.
How to apply for bad credit loans in California
You can apply for a bad credit loan via our website. Just follow a few steps:
- Fill out an application and submit it for consideration. Provide only correct information;
- Get matched with the right lender;
- Review the loan offer;
- If you agree to the terms, e-sign the loan agreement;
- Money is transferred to your bank account as soon as the same day.
Who can get a fast loan with bad credit?
Lenders from our network have loyal requirements for potential borrowers. You are likely to get accepted for a loan in CA if you meet the following criteria:
- you have reached the age of majority in your state;
- you have some kind of identity verification;
- you have a valid bank account in your name;
- you have a valid phone number and internet access.
Before you get a bad credit loan, you don’t have to collect a lot of documents and provide collateral. There is no need to call the employees of the company by phone, explain why you have a bad credit history, prove your current solvency.
You can also apply from your smartphone without any problems.
Do not forget to note in the questionnaire that you have open loans or have had payment delays in the past. Honesty increases the chances of a loan being approved.