If you're worried about your credit score, you're not alone — approximately 16% of Americans have a bad credit score, making it harder to get ahead financially. Whether you had difficulties making payments years ago or simply haven't had the time to build up a decent credit score, a bad credit score has some serious repercussions. For example, you may have fewer chances of securing a home loan or achieving optimum insurance premiums. Your credit score may even impact your employment opportunities.
Even though "perfect credit" is something only 1.2% of the population can currently claim, improving your credit score is certainly possible. By partnering with a reputable company like Atlas Credit, you can strengthen your credit and increase your chances of reaching your goals. Learn when a good credit score can really make a difference and how you can improve your situation.
What Is Good Credit?
Good credit is a measurement of your ability to pay back the money you owe over time. The three nationwide credit tracking companies — Equifax, Experian, and TransUnion — give everyone who has borrowed money a score ranging from 300 to 850. People who rank near the top have the best credit, and they get there by paying off their balances quickly. People with poor credit at the bottom of the scale may have defaulted on what they owed in the past or may not have made consistent payments. There are several types of credit scores, but most lenders use the FICO scoring system to determine the result of your credit application. Here are just a few reasons you need to care about your credit score:
- Bad credit can prevent you from borrowing in the future.
- If you do borrow money, you will pay a higher interest rate, which can lead to accumulating more debt.
- You may have to pay a deposit when you sign up for utilities in case you default on your bills.
Who Decides if a Credit Score Is Bad?
The credit tracking companies take into account every transaction you have made in adulthood. They use your past actions to create a bigger picture and determine whether you are likely to pay off your debts in the future. Several factors impact your credit score, such as:
- How much you use credit
- How big your debts are
- Whether you pay bills on time
- How many credit cards you have
- The amount of time your loan accounts have been active
- New credit applications
- Whether you have a history of bankruptcy, foreclosure or bankruptcy
When Your Credit Score Matters
While bad credit may hinder your chances of getting ahead, a non-existing credit history could potentially be worse. If you ever try to purchase a new or used automobile, there's a great chance that whoever you buy it from will run a credit check to see if you qualify for fair payments. This isn't to say bad credit will exclude you from buying a car, but it significantly increases what you owe monthly.
If you're looking to rent a new house or apartment, your credit score will also impact your rental success. While many apartment complexes and property managers will take a hard look at your credit score before they accept your application to rent, they'll still be somewhat lenient if they're desperate to fill empty homes. However, if they receive applications from other potential renters who have better credit scores than you do, they'll go with the higher number every time.
Remodeling your home, buying new equipment for your small business, or paying for your big family vacation are all large expenses. Taking out a loan with a conventional lender like a bank helps you settle these costs, yet you may have much higher interest rates and tough-to-meet monthly payments. Plus, they'll probably require you to pay back that loan ASAP.
This is all to say that your credit score does matter in most cases in life. It's up to you to be a responsible borrower and user of credit. Make sure always to pay your bills on time and avoid accumulating a mountain of debt — trust us!
Why Credit Is Important
Good credit opens doors. While you may not be in the market for a new home or a new vehicle today, you probably will be down the line. Good credit shows lenders they can trust you to pay back a loan. You need to prove you are a good risk to secure the funding you need.
Credit history offers a snapshot of your past behavior. Of course, it does not take into account things like job loss or tragedies that can occur in life and impact your ability to pay the bills. That is why Atlas Credit considers more than just your credit history when granting loans. We look at the big picture and whether you currently have a decent job.
Not every company does this. We are relatively unique in our embrace of those with bad credit — but if you do want to address your bad credit and turn it around, we are ready to assist.
Can Bad Credit Be Fixed?
Although there are consequences of a bad credit history, you can improve your score. At Atlas Credit, we provide personal loans to people with bad credit throughout Oklahoma and Texas. When you borrow money from us, you receive the opportunity to show you can pay back that money on time.
We structure your monthly payments to fit your financial obligations. You can show lenders you are responsible by keeping up with the payment schedule. Repairing your credit score takes time and effort, and you can use Atlas Credit's loan to help you. Some other tips to help you repair your credit score quickly include:
- Increase your credit limits: While it's not always possible to increase your limit if you have a history of bad credit, it's an opportunity worth investigating. Your credit utilization ratio impacts your score, and a higher limit will improve the ratio, resulting in a better score.
- Settle collection accounts: If your accounts have been sent to collectors, put these payments at the top of your priority list. Lenders will be less likely to approve future credit applications if you have collections listed on your credit reports.
- Look into credit builder loans: By applying for a credit builder loan, you'll receive a small amount of cash upfront. You'll then have the opportunity to make timely repayments to prove yourself as a responsible borrower. At the end of the loan term, you will get the rest of the money and the lender will report your payment record to the main credit agencies.
- Apply for a secure credit card: When applying for this type of credit card, you'll need to deposit a lump sum. Making on-time payments will help you to improve your credit score.
What Is a Personal Loan?
First of all, a personal loan from Atlas Credit is nothing like a payday loan. While payday loans are also available for people with bad credit, the repayment plan for a payday loan is harsh by comparison.
It's right there in the name. A payday loan requires you to pay back the amount by your next payday. The interest added on these loans is sizeable, to say the least, and failing to make this repayment results in financial penalties.
Personal loans, on the other hand, are like a direct infusion of cash to your finances that can be paid back at your leisure. You won't have to offer up your home for collateral, and you'll have more manageable monthly payments.
Should I Get a Personal Loan?
Getting a personal loan is a personal choice. You should feel comfortable with your decision and thoroughly understand what you need to do to rebuild your bad credit when you get a personal loan. Keep these things in mind:
- You must make on-time payments each month to raise your credit score.
- You must budget for your monthly loan payments.
- You must have a steady source of income, such as a regular job, to receive a personal loan.
If you are employed and willing to take on these commitments, you are likely to receive approval on your loan from Atlas Credit. Borrowing money and repaying it will increase your credit score, and when you do that, you also can qualify for bigger loans in the future, such as mortgages or vehicle loans.
Does Applying for a Personal Loan Hurt My Credit?
Applying for the loan will not hurt your credit in the long term. The only way your credit will be impacted by a personal loan is if you fail to make your payments on time.
With Atlas Credit, filling out an application takes just a few minutes when you apply online. Our team will then verify your employment details and banking history before deciding. We notify you of our decision quickly, sometimes within hours. You can also apply at any of our locations throughout Texas and Oklahoma.
It's important to note that you will lose a few credit score points when you apply for this loan — but this drop will not last. You will quickly make up for it when you receive your loan and begin making on-time payments.
How an Online Personal Loan Can Increase Your Credit Score
When you make regular, on-time payments on your personal loan, Atlas Credit will report your consistency and trustworthiness to the major credit bureaus. That way, you can demonstrate to future lenders, landlords and more that you deserve fair treatment.
Plus, when you qualify for and receive a personal loan, you can avoid other negatives like an overdrawn bank account and late bill payments. Without the money you can receive from an online personal loan, you may end up further in the financial hole than you were before.
5 Tips for How to Build Good Credit With a Personal Loan
Think of a personal loan like a life preserver thrown out to individuals caught in the raging currents and crashing waves of a financial storm. By staying afloat, you can make it safely through the storm and come out on the other side a stronger swimmer. Use these five tips to navigate the financial waters.
1. Take Out Only the Amount of Money You Need
When taking out a personal loan to build credit, don't overextend yourself. You want to show you can handle your finances responsibly to build your credit back up. Take the least amount of money you need so that you can pay the loan off more quickly.
For example, if you only need $300 but you get approved for up to $1,100, don't take the extra $800. Staying out of debt can increase your credit score, so the less you owe, the better your credit score will be.
2. Apply for the Loan With a Specific Need in Mind
Getting a loan to build credit works much better if you borrow the money to put toward a specific purchase. Then you will only take out what you need instead of focusing on what you want. You can borrow for a range of things, such as:
- Vacation
- Holiday gifts
- Pay off a credit card
What you choose is your decision, but use the money immediately to put toward that expense. Otherwise, you risk spending the loan on something else and not paying for what you really need, which can set you back on your repayment.
3. Make Your Payments on Time
Credit rating services value consistency. If you make your payments on time every month, even when personal loans are small, you can build credit. Reliability represents a large part of raising your credit score. Lenders want to know that you will pay them back when you buy something on credit or take out a loan. One way to ensure you don't forget to pay a bill is to automate your payments.
Making timely payments shows that you take this responsibility seriously and are committed to paying off your debt. The credit rating services appreciate these qualities. Plus, the more of your loan you have paid off, the lower your debt load will be, which is, of course, a good thing.
4. Skip the Credit Card Purchases
As you work to build up your credit by getting a loan, you want to avoid doing things that can impact your credit negatively. That includes building more debt.
Put away your credit cards to avoid the urge to buy things. Credit cards usually carry a higher interest rate than personal loans, and you can fall further into debt. Instead, focus on paying down your most significant chunks of debt first to boost your credit score.
5. Check Your Credit Report, But Not Too Often
Your credit score changes over time, but checking it too often after taking out your personal loan can actually count against you. Look at your score once a year, and you will see the positive impact paying back your personal loan has had.
Personal Loans Build Credit
At Atlas Credit, we firmly believe that individuals and their families should be able to qualify for a personal loan regardless of their bad credit score. We are always ready to say yes to applicants in situations where that extra cash could help them pay for unexpected expenses or emergencies. Even if you simply want to remodel your kitchen or have your vehicle repaired, a personal loan from Atlas Credit is always a better choice than maxing out your credit cards.
Apply For a Personal Loan Online
Our helpful associates are always ready to work hard to get you a personal loan at the best possible rates regardless of your credit score. Don't let yourself get pulled under the waves of your current financial downpour — apply online for a personal loan of up to $1,400 from Atlas Credit or come in and see us today at any of our Texas or Oklahoma locations.
Do loans build credit? When you follow our tips, they do. For more awesome financial advice from a bad credit or no credit lender you can trust, read the Atlas Credit blog!
