When you’re in need of money, a great option is the personal loan. There are essentially two kinds of these: the secured loan and the unsecured loan, and there are literally countless lenders from which you can obtain either.
However, not all lenders are the same. For one of the top guaranteed unsecured personal loans with no credit check, peruse the online merchant in the link to learn more about their specific offering. In the article below, you’ll get a better understanding of the steps to take to help ease the current financial burden in your life.
The Importance of Credit Score for Your Unsecured Loan
With an unsecured loan, you don’t have to put up collateral in the form of your house or vehicle; however, the risk involved must still be assessed somehow. Your lender does this by taking your credit score into account, and charging you a rate of interest based on this score. Clearly, then, it makes sense to improve your credit score as much as you can before applying for an unsecured loan .
The above only follows in general; it is possible to find reputable lenders who do not conduct a credit check before extending a personal loan to you. This helps, particularly, in cases where people have very bad credit, or a very short credit history (maybe you just graduated from high-school or college, for example, and haven’t yet used any of the many credit cards on the market.
Considering Credit History Factors
The number one thing you can do to improve your credit history and expand your list of prospective lenders is to simply pay down your outstanding bills. This refers primarily to unsecured loans such as credit cards, personal loans you might already have, etc – anything where your property or assets aren’t being used as potential collateral in the event you can’t pay back the loan.
By paying down your present bill, you reduce a very important metric in the overall consideration of your FICO score: the debt-to-income ratio. It takes only a moment’s’ thought to understand why: by having considerably more income than you have debt, you give confidence to a lender that you shouldn’t have much trouble paying down new debt – and the interest rates you command from them will reflect this.
A good debt-to-income ratio also leads to more loan opportunities; some lenders are a stickler for a certain figure, and anyone below this number won’t be considered. As mentioned above, this is another reason why there’s a good market for lenders that don’t even consider your credit history before making a loan offer and approval – because there are plenty of people in that situation.
Making Payments on Time
This is very important. By missing payments, you’re missing out on the opportunity for lower interest rates in the future. Even if you obtain a lender that doesn’t perform a credit check before approving an unsecured personal loan, there’s no question that your interest rate would be lower if you had a better FICO score. After all, the lender has to have some way to be compensated for the risk she’s undertaking by extending you a line of credit. Pay on time, every time, and you’ll soon find yourself out of the subprime ending rate, and better offers will be within your reach for future loans.