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How Your Credit Score Affects Your Unsecured Loan Prospect - Unsecured Loans Now Articles Unsecured Loans Now Articles

How Your Credit Score Affects Your Unsecured Loan Prospect

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Posted on 5th January 2012 by Sandra Thompson in unsecured loan |unsecured loans |Unsecured Personal Loans

When in need of financial assistance, a consumer may consider acquiring an unsecured personal loan.  Lenders that offer unsecured loans do not require any form of collateral to guarantee repayment.  On the other hand, many lenders do require good credit or an impressive credit history to ensure that the borrower is capable of repayment.

This is why consumers are advised to check their personal credit first prior to submitting their loan application.  Take note that some lenders have strict credit requirements and if you have less-than-perfect rating, your application may get declined.  In addition, your credit score will be one of the major basis of your loan’s rate and terms of repayment.

A high credit score will surely win you lower interest rate and if you have a low score, a prospective lender may insist on a higher rate to make up for the risk. However, it is still possible to find an unsecured loan lender that offers a reasonable deal so it’s important to spend some time doing research.

What are the things you need to keep in mind when applying for an unsecured loan?  Consider the following tips:

Check your report.  Order the latest copy of your credit report from the three major credit bureaus.  Carefully examine your report to make sure that all details and charges in your accounts are correct.  Take note that errors can significantly pull down your credit rating.  You can correct these errors by sending a letter to the bureau that issued your credit report.  Taking this step can instantly boost your score and improve your loan prospects.

Compare unsecured loan deals.  There are many lending companies that offer secured and unsecured loans.  However, not all unsecured loan offers in the market are legitimate or fair.  You can easily compare loan deals online by visiting a comparison website or the lending company’s website.  Check the interest rates, fees, terms and conditions.  If the loan has a variable rate, keep in mind that the rate is subject to increase as it is based on the Prime Rate.

Make sure your payments are reported.  Choose an unsecured lender that will report your payments to the three major credit bureaus.  This way, you can build up your credit score through timely submission of your monthly unsecured loan payments.   If you have a poor score, order a copy of your report to check your progress.

Spend the loan wisely.  See to it that not a cent of the loan is wasted.  Borrow only the exact amount you need and spend the money prudently.  If there is an excess in the cash you borrowed, use it for repayment instead of spending it on other things that are not planned.

Read the fine print.  Before submitting your application, carefully read and understand the statements in the Agreement.  See to it that there are no hidden charges or unfair terms.  Remember that once you sign up the contract, you will be subjected to comply by your lender’s terms and conditions.

About the Author

Sandra Thompson is a loan consultant with http://www.unsecuredloansnow.com and has been providing consumers and business owners with Unsecured Loan since 1989. For years she has helped people with loan and credit problems especially pertaining to Unsecured Personal Loans, Student Credit Cards and Unsecured Credit Cards. Copyright 2012.

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