Bad Credit - Cigno Loans

How to Get a Loan with Bad Credit

January 2, 2020
, , , Bad Credit Loans, Easy Loans, No Credit Check Loans

A blemish on your credit history can make it more difficult to get approved for a loan, but you do have options. If you need a financial solution that won’t rule you out based on past mistakes, the good news is there are lenders who will still consider your application.

In this article, we look at how to get a loan with bad credit, the steps you should take, and some advice for improving your credit history moving forward. We also discuss home and car loans specifically.

 

Step 1: Check Your Credit History

The first thing you need to do is find out just how problematic your credit history might be. This also gives you the opportunity to review your report for any potential errors – the last thing you need is a false incident negatively impacting your credit score.

There are several credit-reporting bodies that are obligated to provide your credit report for free once per year. These include:

You can also access a free report within 90 days of having a loan application rejected.

You can read more about accessing your credit report on the government’s Office of the Australian Information Commissioner website.

 

Step 2: Select a Viable Lender

Lenders to Choose From - Cigno Loans

Once you know if your credit rating is excellent, very good, good, average or below average, you’ll be better able to apply with the appropriate lenders. If your score is below average, you can skip the big banks and other institutions that won’t consider you and move directly to companies that specialise in bad-credit loans.

It’s also worth looking for a lender that uses real people to make decisions rather than relying on algorithms. A human is sometimes more likely to say yes – even when a computer says no.

Finding the right lender can feel overwhelming, so you may prefer to work with a finance specialist like Cigno to arrange the loan for you. We know which lenders will consider borrowers with low credit scores, so you’re less likely to have your application rejected.

 

Step 3: Apply

This step doesn’t vary too much from applying for a regular loan. However, it’s in your best interest to be honest and upfront about your credit score and provide as much evidence as possible showing that your current circumstances won’t lead to any repeats of previous defaults. For example, it may help if you bring recent bank statements that show you successfully paying bills and repaying other loans.

 

Step 4: Improve Your Credit Score

Paying Off Credit Card - Cigno Loans

You’ve experienced the restrictions a low credit score can place on your access to loans, and you’ve likely paid more interest than you would have with a healthy credit rating. There’s no better time to take a serious look at improving your credit history.

The obvious place to start is by repaying your bad-credit loan promptly and in full. Then you can consider some of these tactics for improving your score:

  • Lower the limits on your credit cards
  • Set a direct deposit schedule to ensure all your rent and bills get paid on time
  • Aim to pay off your credit card in full every month
  • Consolidate your existing loans/cards into a single loan
  • Make mortgage and other loan repayments on time.

Taking steps now to bump up your credit score will make it easier in the future to get approved for loans with lower interest rates.

 

How to Get a Home Loan with Bad Credit

The steps above are all relevant for getting a home loan. However, there’s an extra tip to consider when applying for a mortgage: lenders mortgage insurance (LMI). If you can save up enough of a deposit (usually around 20%), you may not need to worry about LMI. This means you skip the extra step of having a mortgage assessor review your application – and that’s one less person who might reject it.

Home Loan and Car Loan - Cigno Loans

How to Get a Car Loan with Bad Credit

Just like getting a personal loan, successfully applying for a car loan with bad credit involves:

  • Knowing your rating in advance
  • Being honest and transparent in your application
  • Taking steps now to improve your rating
  • Proving you’ll be able to repay the loan (e.g. with evidence of stable employment and other prompt repayments).

To discuss the short-term finance solutions available to you based on your credit score, feel free to contact our friendly team today.

Why So Many People Prefer Loans With No Credit Check

September 17, 2018
Bad Credit Loans 5

Thinking about taking a loan anytime soon? Most loans will feature a credit check near the start of the application process. There’s a growing amount of people now that look for loan options that bypass the dreaded credit test. Here, we’re going to cover some of the most important reasons that loans with no credit check are becoming increasingly attractive to so many borrowers.

Let’s get going!

Credit checks are bad news if you have a poor credit score

One of the main reasons for people to dodge the credit check is because they have a bad credit rating. Your rating lets banks and other loan providers know that your past experiences with borrowing haven’t gone so well. They see this as really strong evidence of your lack of ability to pay back what you owe, so they’ll more than likely refuse anyone that has a score below a certain point.

At Cigno Loans, we don’t assess people based on their credit history when they apply for our short-term loans. Your credit score only says so much and we believe even those with bad credit should be allowed a chance to prove themselves able to borrow successfully. The most important thing we look for is your main source of consistent income. As long as we can see that you can afford to pay what you owe us when your next payday comes in, we’ll be happy to make you a loan offer.

Having no credit checks saves time

Loans with no credit check are a whole heap faster than loans with full checks. That’s why applying for a personal loan from a bank takes so much time. They have so many more processes to deal with than we do. We can provide instant payout loans within 24 hours of your application being approved. In some cases, we’ve even had the money paid out within a few hours.

This kind of same-day speed is impossible if you insist on running credit checks. When money is an issue, time can be everything. We understand that when you have an urgent cost to settle right away, you can’t sit around waiting for the money to be paid to you a few weeks or days down the line. You need it as soon as possible. This is the main reason we’ve structured our process to enable lightning fast payouts direct to your bank account.

Saving is hard when you live on a limited budget. Ideally, everyone would have a safety fund to fall back on when things are tight. If you’re still working on building yours, and a huge emergency cost has turned up out of the blue, your options can be quite limited. Our fast short-term loans are designed to be there for you when you need just enough to get you to your next payment from work. We offer up to $500 for first time borrowers and our website allows you to apply for any amount you need below this level.

Refusal based on credit can sometimes hurt your score further

Have you ever tried to apply for a credit card and been rejected only to find that the failed application has actually driven your score down even lower? This is one of the most frustrating things about the credit check system. Not only can it be really hard to access the credit you need if your score is less than perfect, but being rejected can damage your rating even further.

You might have a stellar record in your bank account history, but still be struggling to access credit due to a low score. This is another reason why more and more people are dodging credit checks altogether. Sometimes it’s best to go for loans with no credit check than taking the risk of applying for one that’ll set your rating back even more if you’re not accepted.

There they are! These are the main advantages of seeking a loan that is based on your current income rather than your credit score. We hope you’ve found this review helpful and will be happy to help if you have any further questions about our loan application process. Feel free to get in touch or leave a comment below for more information.

Why So Many People Prefer Loans With No Credit Check

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Read more about no credit check loans here, or in our previous blog post: Why No Credit Check Loans are Your Solution to Unexpected Expenses