Here are 2 Ways to Improve Credit Scores to Get Personal Loans for Bad Credit

  • Kinrot
  • May 27, 2024

When you apply for a loan, of course, the credit score is the first thing the lender will track. The credit score is very important because it can be taken into consideration by the lender regarding whether you can pay off the credit on time until it is paid off.

However, what if you want to apply for a loan like a personal loan but your credit score is bad? Take it easy, use the following ways so you can get personal loans for bad credit.

The Easiest Way is to Pay Off All Your Debts

If you have a lot of loans, then pay off all your loans first. That way, your credit score will be good again.

If you find it hard to pay off your debt, then use the debt snowball method. So, pay off your debt that has the smallest nominal value first. Then, proceed to pay a large amount of credit.

This is related to psychology where humans prefer to pay debts with a small nominal first compared to large ones. So, apart from that, make a priority list of debt payments to be able to determine which debts are due near and which are due a long time ago.

For large nominal debts, pay the minimum amount first. So, just pay 10% of the total debt with this large nominal.

Meanwhile, you can pay off debt with a small nominal until it is paid off first. That way, your debt burden will be reduced. Do this until all your debts can be paid off until your credit score can finally be good again.

Perform Debt Restructuring

So that you can still get personal loans for bad credit, then use debt restructuring. So, this method will help you to overcome bad credit.

The trick is to come to the bank or institution that is the lender for you. Then, explain your needs and goals to the bank. Tell them that you want to apply for a loan restructuring.

What is loan restructuring? So, it is a way that can be done to improve the payment or pre-credit process between lenders and borrowers.

This can actually be done if the borrower experiences problems in making loan payments. So, there are 3 types of debt restructuring that can be submitted.

The first is rescheduling related to changes in the time of repayment of debt or the tenor. Changes in the tenor usually make the tenor longer, so that the cost of loan installments can also be lighter.

The second is restructuring where the bank will change the terms of the loan. Of course, these requirements will not change the ceiling amount of the loan.

The third is reconditioning which is carried out by rearranging related to credit conditions. This will ease the debtor’s responsibility. In this way, lenders can lower interest rates.

You can choose the two methods according to your abilities. However, whatever alternative method you choose, make sure that you keep trying to pay off the loan debt so that later you can still get the opportunity to get personal loans for bad credit.