How Short Term Loans Might be Used to Improve Your Existing Credit Score

There are a number of different ways in which as consumers we can attempt to improve our overall credit ‘score’ or ‘rating’. A credit score refers to a standard which demands your ability or in some cases, inability to repay potential credit based agreements. Lenders will use an applicant’s credit score or rating when deciding if their product is suitable and affordable. The credit score of an individual will vary depending on the credit reference agency and how they accumulate data contained within an individual’s credit reference file. Where some credit reference agencies will use a number system to indicate an individual’s credit worthiness, such as 1 through to 5 (5 being excellent), another may instead use wording such as ‘average’ or ‘above average’. In other instances, lenders of credit based facilities may formulate their own internal scoring system based on numbers, say 100 for poor credit and 700 for great credit history. The point being that fundamentally the state of your credit, whether it be a score or rating can have a direct impact on your future ability to obtain new credit, should you wish to do so.

Improve Your Existing Credit Score

Improve Your Existing Credit Score

Of course it would be fair to say, with the above in mind, that sometimes a consumer’s ability to obtain new credit can be halted by the history contained within their credit reference file. This is it is so important that any form of credit, big or small in size, be maintained as originally set out in the agreement. There have been many examples over the years where a missed or defaulted repayment on a seemingly trivial mobile phone supplier contract or mail order agency payment, have later stopped consumers from being able to obtain a mortgage on a property. This may seem to be a little extreme but given the sums of money being considered for loaning in terms of mortgage suppliers, they would of course want to be confident smaller repayments have previously been repaid as they were required to do so.

It is little wonder then that many millions of consumers look to improve their credit score or rating each and every year. There are a number of different ways this can be achieved and one of which can be the use of short term loans. Short term loans are small in value and allow consumers the ability to repay a small commitment over a number of pre-agreed monthly repayments. Short term loans can therefore give consumers the ability to demonstrate that compared to previous behaviour, they now have the desire and furthermore means to repay a new credit agreement set out to them. In addition to considering short term loans as a means for improving an individual’s credit score or rating, another example could be via a credit score viewer. There are services which exist which not only allow consumers to value their current credit worthiness and therefore score but in addition provide information as to ways in which the overall score or rating can be improved over time.

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Borrowing Instalment Loans For When Cash is Needed Quickly

There can always be times when someone needs money and this can be down to so many different reasons. There can be some people who may need a large amount of money as they are looking to make some form of expensive purchase. This could possibly be for a new car perhaps or maybe someone is looking at putting money towards a new house etc. There can then be others who may only need a small amount of money to possibly just have some help paying an unexpected bill or they could just need some help making their finances last until they are next paid from their employer. Now regardless of whatever anyone ever wants the money for, if they have this saved away they can then look to use it as required to pay for whatever they need. Some people may then even have saved away to pay for their requirement outright. Now turning to savings is always nice when it is available however, this is not the case for everyone. If it is not available then a person may then have to look at borrowing the money.

When it comes to borrowing money when this is needed, some people may then not know exactly what options they have available at their disposal. For example if a loan is required then both short term loans and instalment loans could then be available. This is a way that a person can then look to borrow a selection of different loan amounts for that person to then repay the debt back over a range of different repayment terms. It can then be common that someone with instalment loans can borrow more and then they can repay that debt back over a longer duration. A mortgage for example is actually one of the most common instalment loans that people tend to borrow. So many people from all over the world of course have or have had a mortgage at some stage in their lives.

Borrowing Instalment Loans Quickly

Borrowing Instalment Loans Quickly

I have found that borrowing instalment loans can have a number of different benefits for that person. It can give people flexibility on any amount borrowed. They can borrow a range of different loan values and can then repay the debt back over a suitable repayment term that suits both them and the lender. Another benefit of this borrowing is the fact that people can often get their cash quickly when it is needed and I always feel that this is going to be important. People can apply for instalment loans mainly online or sometimes it can be done over the phone. The application process can often be done in just a matter of quick minutes. Now if that same financial application is then accepted by the lender most of the time they will look to pay out that borrower that very same day. They will often pay out the loan into the borrowers bank account and these details will be provided at the application process.

Applying For Finance Through Direct Lenders

If anyone is needing to borrow money and has then submitted some form of financial application, they then may be curious as to what happens during their application next. This may vary of course depending on the lender that is chosen but most of them will carry out very similar checks before they reach an overall lending decision. There can certainly be a high number of different factors that can contribute to the lending decision and these will be explained below in further detail. I will also explain the three main application stages for when people are applying for loans through direct lenders.

The first part of most applications through direct lenders would be the part where a potential borrower has to input their details regarding personal information. This is when someone will be asked to fill out information regarding such things as their full name, their home address, their date of birth as well as often their employment details. They can then also be required to complete a section that asks for both their bank and their card details. All of this information will be required before any lender can reach a decision on the finance. In certain cases people can then be requested for documentation in order to get something progressed further. This can be to validate something or confirm something as requested from that lender. For instance maybe a utility bill could be requested to provide someone’s address.

Finance Through Direct Lenders

Finance Through Direct Lenders

Another common stage on every direct lenders application will be the credit check on the person applying. Any lender will have to calculate the chances of the borrower repaying the debt back once they have taken it out. They can normally have access to the person applying credit files and they can then use this information to see how they have fared with repaying other debts in their past. They will never be able to know exactly whether a person has the intentions to repay the debt but they can work out the likelihood of this being done. If someone does have bad credit and a low credit score as a result they can then possibly find it tough to get finance approved. Some direct lenders however, having said that might still be able to help them get finance.

The final stage on every financial application will of course be the final decision. This is when a borrower finds out whether or not they have been approved the finance. If they are accepted they can then often quickly liaise with the lender and see how long it will take them to obtain their short term loan or other finance type. If however, on the other hand if the person is declined then should they wish to, they can then move on elsewhere to try and get the finance approved by another lender. There can be a high number of different factors that can go into the final decision including things such as credit and affordability checks. Once the lender has reached their decision they do not have to justify it and they could just say unfortunately at the moment we as a company are unwilling to lend.

Direct Lenders and Short Term Loans That can be Available

There can always be times when people want money and this can be so many different reasons. The amounts can also vary as to what people want and need. Some people may need a large amount of money as they are looking to make some form of one off expensive purchase. This could potentially be for a new car perhaps or maybe someone is looking to put a large amount of cash towards something for the house. There can as well be others who only need a small amount of cash to maybe just tide their finances over until they are next paid from their employer or they just need some help to pay for a bill perhaps. Now regardless of whatever absolutely anyone ever needs the money for, if they have this saved away they can use it as required to pay for whatever they need. Some can pay for their requirement outright or some at least can just put some money towards what they need. They will then have to replace the money used as soon as possible to start the savings process again. If that is not possible then the chances are someone will then need to borrow the money. Direct lenders could then be here be needed.

Available Short Term Loans

Available Short Term Loans

When it does come time for someone to borrow money they can often see that short term loans can be one borrowing option. It is the short term loan way of borrowing that I will be focusing my article on now. This is when people borrow usually small loan amounts for the debt to then be repaid back over a short period of time. A short term loan is defined as such as a way to borrow money for repayments then due back over anything up to a twelve month payment term. They are designed to help people over short term time frames and never should this loan be used as a long term borrowing solution. It can be common that this way of borrowing is used by a high number of different people who have poor credit and as a result have struggled to borrow money in the past.

The fact that short term loans from direct lenders can normally help people borrow money even if they have bad credit is a massive positive on that finance. Another benefit would be the fact that people who need cash quickly in their chosen bank account can get it. When people want to borrow money the chances are they want this quickly and short term loans can definitely enable that to happen. People can often apply for the loans online or over the phone in a quick and easy process that should only take minutes to complete. If the same application is then accepted by the lender that person can look to get the money the very same day as they applied. There can also be some cases where a borrower is approved for a short term loan and they can get the loan within just minutes of that decision.