When was the last time you checked your credit score? If you're like the majority of people in this country, it may have been far too long ago.
A recent study showed that nearly 60 percent of Americans either never check their credit score or check it less than once per year.
This can lead to some serious problems. Not knowing whether your credit has moved up or down can seriously hinder your ability to make wise financial choices. And if you have bad credit, you may not know until it's too late.
One of the worst times to find out your credit score is too low is when applying for a personal loan from a traditional lender like a bank or credit union. If your score doesn't cross a certain threshold, they may politely show you the door.
When this happens, don't worry — there are still ways to acquire a quick and easy bad credit or no credit personal loan that can actually increase your credit score over the long term.
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:
- 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.
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!