How to Improve Credit Score with Small Loan?

Overview:

Bad credit score will make it difficult for you to secure either home loan, auto loan, student loan, etc. If you wish to improve your credit score quickly, then consider going for small loans. This is by far one of the best ways to improve your credit score.

Instructions:

  • Apply for a personal secured loan; however, with a bad score, you will not qualify for the same without a security. Enquire about the security and other terms and conditions with the bank.
  • Be prepared to pay high-interest rate. This is unfortunate, but people with poor credit score will have to pay so in order to acquire the loan. This whole good even if you have offered a collateral. Nonetheless, in the future, after your score improves you can enjoy bank loans at the reasonable rate of interest.
  • Fight the urge to borrow a huge amount and settle for a small sum because the whole idea here is to improve your credit score.
  • Stay away from small money lenders because they do not report to the credit bureaus about the repayment of the loan.
  • Ensure that you pay your monthly instalments on time and if possible clear the whole amount of time. This will improve your score to a greater extent.
  • If the whole concept of borrowing was to improve your credit score, then open a saving account with the amount you have borrowed. After a stipulated period of time, the same can be used to clear your debt.

With little efforts, your score can be improved, and you can enjoy borrowing at a reasonable rate of interest.

Updated: December 1, 2016 — 10:38 am

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