What you need to know about low or bad credit?
The term “bad credit” is somewhat vague, so we will try and make it clear for you. Having bad credit does not always mean that your history is bad. It might just be that your credit rating is less than perfect.
Have ever been rejected by a lender for bad credit, it might just be that your score did not meet their minimum requirements.
People with bad credit or low credit scores can be divided, into two explanations.
The First:
You have been active in the credit market, but due to unforeseen circumstances like losing your job, or some financial difficulties, you have not kept your accounts up to date or have neglected to pay your credit, and even though there are no judgements against you, your score has dropped so low that you can not get credit.
The Second:
You have never had credit before. There is no information to base your credit rating on, leaving you with no credit options.
Having no credit or poor credit is a major stumbling block to getting a loan because you regarded as a high-risk customer who might default and leave the credit provider struggling to collect the loan repayment.
It is a known fact:
Until your credit score is top-notch, you will not fit the standard lending guidelines that banks have to follow.
However, many clients from South Africa apply for loans every month, even if their credit scores are not top-notch and we recommend, that you rather try and improve your credit standing before applying as this will give you a better chance to qualify.
When you apply for a loan, lenders will check your credit score and affordability and other business rules that they have in place to protect you from taking on credit irresponsibly.
Is it possible to get loans for bad credit?
In life, nobody likes to be judged. When it comes to loans and credit, credit providers will look into your credit score when you apply for credit, for them to make an informed decision about whether or not to lend to you. If you have bad credit you can be sure that they will not always consider helping you out.
Need to know more about your credit score?
All detail of your credit behaviour gets listed by Credit bureaus. When you open an account or take on credit, your repayment behaviour is taken into account by credit bureaus, whether good or bad.
Your credit score is busy calculating all the time. From your first credit application, it starts evaluating you. Every time you pay your credit on time, it starts adding up, also, every time you pay late it subtracts. By not paying at all, it starts going into the red.
The higher your score, the better the risk for credit providers and lenders, this signals to them that there is a good chance that you will pay without any issues.
A poor or low credit score indicates that the borrower has had a problem settling credit or debt in the past. Possibly, doing the same in the future, thus reducing your chance of getting approval. Under this circumstance, if you do get the loan, it will be with a not so favourable interest rate or term.
When applying for credit, all credit providers will check out your credit score. So should you.
There are plenty of ways to find out your credit score. Most credit bureaus will even let you check your score free once a year. You can Sign up at Transunion(ITC), Experian or Compuscan.
With these credit bureaus you have an option:
- Sign up and pay a small fee and get your report once-off or monthly.
- Get your free credit report once a year. Any one of the listed credit bureaus has these options.
Credit scoring can be complicated, what you need to understand, is that every payment or no payment will reflect. Learning to be responsible with your credit score can set you up to reach your goals.
One of the most important things, you can do to protect your credit health, is to research before applying for a loan, especially if you have bad credit. A low credit score does not necessarily mean that you have no options, but the available credit options will be limited if your credit score is not suitable.
Some Factors that affect your credit score:
- Payment history, (payments, late payments, no payments, judgements)
- Length of your credit history (how long have you been credit active),
- New credit or accounts,
- Accounts in use,
- How many monthly inquiries.
How can I improve my credit score?
Know your credit score, and access your credit report regularly.
If you fall into the poor credit or high-risk category, the truth is you are going to end up paying more for a loan over shorter terms and chances are that you will most probably not get a loan. If your credit is bad, or lower than what you would like it to be, understand that it does not have to be that way, best is to build it up before taking out a loan.
The best way to do that is to start by paying credit that you have due, and keeping up the payments as your credit rating will only improve over time.
Tips to better your credit report
- Pay your credit on time: If your credit history indicates that you pay on time every month and pay at least the minimum due, your credit score will follow and reward you accordingly.
- Do not apply for too many loans at the same time: This can damage your credit score. Every time you take a new loan, open a credit card, open a new clothing or furniture account, the lender does a credit check, which in the short term can damage your credit score.
- Check for errors on your credit report: Check your credit report at least once or twice a year. Check if there is balances or instalments on there that shows outstanding even though you have settled it. You can then ask the credit bureaus to remove that listing. You can contact the party that listed that on your bureau and ask them to remove it.
- Try to avoid maxing your credit limit: Using your full credit limit can have an impact, on your credit score and your affordability, debt to income ratio. Which means that you might not get new credit until your current credit balance is lower.
Do You Offer Loans for Emergencies?
Yes, Mr Cash Loans provides emergency loans for those who need quick financial assistance for situations like broken boilers, plumbing issues, car repairs, medical bills, and more. Our loans are designed for speed, featuring a fully online application process with funds potentially transferred to your account within hours of approval.
Emergencies can happen at any given time. You might be, in need of a loan very urgently. Many people have a tough time getting a loan approved from banks as they have a bad credit history. Our lenders specialize in assisting people like you and can help you meet your need in a time of financial emergencies.
Some lenders might ask collateral to process a loan if you have bad credit, No Collateral? You can still apply.
Please have a look at our Basic Criteria and Required Documents before applying for a loan with us.
Can You Provide Loans on the Same Day of Applying?
Absolutely! Mr Cash Loans can offer same-day loans, sometimes even within a few hours. Thanks to our fully online application and funding process, our lenders can make same-day payments.
Can I Get a Guaranteed Bad Credit Loan?
We cannot guarantee loan approval, as each application must undergo a series of checks. As a responsible credit broker, we ensure that every customer can afford to repay their loan without financial difficulty, requiring stable employment and a regular income.
While a bad credit loan is not guaranteed, we work with reputable lenders who consider poor and adverse credit histories. With an impressive approval rate, we believe we are the best company to help you secure an affordable loan offer today, and our service is completely free of charge!
What you need to know about loans application procedures
- We can not assist you if you are under debt review, administration or sequestration
- Your loan application will be subject to a Credit Check, and Affordability assessment as required by the NCR (National Credit Regulator)
- You need to be over the age of 21 and under the age of 60
- You need to be permanently employed for at least 6 consecutive months with the same company
- All loan applications are subject to employment confirmation
- You must have a valid South African bank account in your name
- We do not assist people that is self-employed (if you are self-employed or a business owner read here)
So what to do now?
Complete our application and let us help you take the guesing out of whether you will qualify or not.
Remember - We can assist you in obtaining a loan. Most of our service providers are willing to look past some of your mistakes. While everybody can apply with us and qualify, not everybody will be approved depending on your credit status and affordability and employment status. Your loan application can be unsuccessful because of your previous credit behaviour.
Applying for a loan with us will not cost you anything, it is free, so even if you are unsuccessful the first time, try again within a month or so, as conditions change and applying next month could get you a better answer.