How to Improve your Credit Score and Get a Loan Even If You Have Bad Credit History

January 18, 2021 | Louis Tully

Having bad credit makes it harder to take out a loan, and often increases how much you have to pay for insurance premiums, house deposits, and more.

But a bad credit score isn’t the end of the world, and is not an assessment of your ability to pay or to succeed. Here’s what you can do to improve your score, and your options if you need to take out a loan right now.

Knowing How to Take Out A Loan With Bad or No Credit

What affects your credit score?

There are different credit scoring models. The most common one is FICO, which was created by the Fair Isaac Corporation and measures your “credit-worthiness” based on:

  • How many years you’ve had credit
  • How much money you have borrowed in the past
  • How much you have paid off, and whether those payments were made on time
  • How your credit is distributed (mortgage loans, installment loans, credit cards, etc.)

Very few people actually have a perfect credit score. You may be a fresh graduate with no credit history, or—like millions of Americans who lost their jobs in the COVID-19 pandemic—went through a financial crisis through no fault of their own.

Unfortunately, because most banks and institutions use the credit score to evaluate your applications, you can end up being seen as a “credit risk.” Credit cards may charge higher interest, and you may have to pay a higher security deposit and insurance premiums. It also takes longer to get a loan approved.

How can you improve your credit score?

Ironically, even if you’ve gotten back on your feet, and already have a good job or a thriving business, it may take years before your credit score significantly improves. That was what happened to Lily, a single mom who put herself through school after her divorce. “It was really tough for about five years. I was doing odd jobs while studying and taking care of the kids.”

Her hard work paid off and she has a steady job with a company she loves. But her credit score was still badly affected by the years of financial struggle. For people like Lily, financial advisers give these tips for improving credit score.

  • Pay bills on time. When you get your paycheck, the first thing you should do is to pay for utility bills, credit card balances, subscriptions, etc. Use money management apps or calendar notifications to remind you when these bills are due. This is one of the best ways to increase your score.
  • Manage your credit card balances. One factor in your credit score is the credit utilization ratio, or how much of credit limit you use. For example, if your credit limit is $10,000 and you charge an average of $3,000, then your credit utilization ratio is 30%. Ideally, you should keep it at 30% below.
  • Don’t close your old unused credit cards. Credit history, or the length of time you have an account, may also improve your score. Just lock those cards away so you’re not tempted to use them for unnecessary expenses!

How do you get a loan with a bad credit score?

If you’re short on cash, but you have bills, rent or an urgent unexpected expense, how do you cover the cost? Missing a payment, will impact your credit score making it worse. But, qualifying for “traditional loans” from a bank is hard, especially if they view you as a credit risk.

That is when Cash Cow Louisiana is here to help. We have online payday loans for bad credit history, no credit history, or any credit history for that matter!

What is a Payday Loan?

A payday loan works like a cash advance on your next pay check. You can borrow about $100 to $300, which can help cover bills, household expenses, or unexpected expenses like medicines or car repairs.

What Are the Benefits of A Payday Loan?

Unlike bank loans and other traditional loans, it doesn’t require a credit score or a lot of documents. Processing is also fast and easy, especially through Cash Cow Louisiana. You can get the money the same day you apply!

What Are the Requirements?

You just need to show a government-issued ID with your photo (such as a driver’s license), your most recent pay stub, and a blank check from an active checking account in your name.

How Do I Apply for A Louisiana Payday Loan Near Me?

You can go to the nearest Cash Cow payday loan branch, or call us by phone. If it’s more convenient for you, you can also apply online at https://cashcowlouisiana.com/. Just fill out the online request form, and one of our loan representatives will call you right away.

The application process takes as little as 30 minutes. You just have to bring the requirements (your ID, pay stub and the blank check) and you’ll walk away with the money! It’s one of the easiest ways to raise emergency cash.

How and When Do I Repay the Loan?

Most payday loans will be due with your next paycheck, though you can discuss loan terms or refinance the loan. Just call your loan representative to find out more.

Find out more about payday loans, or other loans for bad credit history, at https://cashcowlouisiana.com/.