Bad Credit Loans and Options for People with a Poor Credit History

If you are a consumer affected by a poor credit history, you may not understand why your credit score is so low and what consequences that may have on the bad credit loan you qualify for. Everyone who has ever taken out a loan, gotten a credit card, or entered into any type of payment program for a good or service has a credit score and a credit history attached to their name.


If you have ever missed payments on these loans, stopped paying off a loan altogether, or even just have a lot of debt out in your name you may have a poor credit history. Today, there are many options for people with poor credit histories. They can still qualify for a bad credit loan and other types of financing.


Because consumers affected by bad credit can oftentimes still get loans, they might not think that a low credit score is a big deal. However, easy it is for someone with a poor credit history to get a bad credit loan there are many consequences to having a low credit score that will, ultimately cost the consumer more money. There is a high interest ramification to getting bad credit loans. This means that even though they qualified for the bad credit loan they pay a much higher interest rate for it then someone with good credit. Because their interest is higher they have to pay a higher monthly payment- all of which adds a lot on to what the item ultimately costs them.


If you have several bad credit loans with high interest ramifications, banks will become less and less likely to keep on granting you loans. Lenders will always check the interest rates you are paying on existing loans and credit cards when deciding if they will give you a loan and how much they will charge you for the loan you get.


Maintaining a good credit history will make it easier for you to get the loans you need for the items you want and it will save you money in the future. If you already have a good credit score, you can maintain it by always keeping up with your monthly payments and by being careful about your balances. Many consumers don't realize it but even if you never miss a payment on any loan you can still get bad credit by keeping high balances on your credit cards.


Experts agree that the way to keep your credit healthy is to only ever carry a balance on your cards that is 25% of your limit. This shows lenders that you use your credit sparingly and keep up on payments. If you have already damaged your credit, you can get back on track and improve your score by making payments on time and not defaulting on loans.