Around seven percent of Canadians report having a bad or very bad credit score. A bad credit score can make moving an even more stressful task than it already is. If you’re moving across the country, you may need to ship your vehicle.
If you’re driving to your new place, you’ll need to consider where you’re going to stay on your road trip. All these things can add up quickly.
This can make relocating without a moving loan even harder. Don’t panic if your credit score isn’t very high. We are here to help.
The guide is going to tell you everything you need to know about a bad credit loan. You’ll read several tips that will help you in the future. Continue reading for more information.
Causes
While there are many ways to get a loan with bad credit, it’s important that you know why your score is low. This information will allow you to build your credit back up so you don’t have this problem again.
You’ll see a decrease in your score if you have a high credit card balance. Paying off your cards on time is key to improving your credit score.
Credit card charge-offs are one of the worst things for your score. This happens when the bank closes your account and demands payment in full. Even after the issue has been fixed, it can affect your score for up to seven years.
Filing for bankruptcy and defaulting on a loan is also damaging, so try to avoid those at all costs.
Tip 1: Check Your Score
When you’re considering loans for moving, it’s crucial that you look at your credit score. Don’t just glance at the number; take the time to comb through the report.
You’ll want to ensure that it’s completely accurate. There may be an error that is causing your score to be lower. Even getting minor issues fixed can make a big difference.
Every 12 months, you are entitled to a free credit report from the federal government. You can go online to look at it and ensure it’s accurate.
Tip 2: Get A Cosigner
When applying for a loan with bad credit, you may want to ask a friend or family member to be a consigner. Lenders are more likely to give you a loan if you have someone with a good credit score backing you.
By being a cosigner, your friend or family member is taking responsibility for the loan if you can’t make the payments. This reduces the risk for the lender.
Tip 3: Apply For A Secure Loan
A lender will want to do everything they can to reduce their risk. The lower your credit score, the riskier it is for them. However, a secure loan will make the lender feel more comfortable giving you a loan.
When you receive a secure loan, you must put something up as collateral. This could be your home or car. Keep in mind, if you don’t make your payments, the lender will be able to seize your possession.
Tips 4: Search Around
When you’re obtaining a moving loan, it’s vital that you take your time. You should talk to multiple lenders and find the best option for you.
There are lenders that work specifically with people who have bad credit, which can be very helpful. However, some will have high fees and interest rates, which is why it’s so important to do your research.
Some lenders don’t require a credit check either; however, you’ll see those higher fees so keep that in mind. Don’t expect to get the best rates, but you don’t have to settle for the worst rates either.
If you’re moving unexpectedly or quickly because of a new job or unforeseeable circumstances, you may not have a lot of time to compare lenders. While it’s ideal to take your time, emergency loans are available and can be useful in some cases.
Tip 5: Ensure You Can Pay It
The last thing you want to do is to take out a loan that you can pay back. This will end up hurting your credit score even more.
Be sure you know how much your monthly payments are and when they are due. Before you ever apply for a loan, sit down and write out a budget. This will allow you to see how much you can afford.
Watch Out
Getting a personal loan with poor credit may not be as hard as you think. The tips above can be very helpful, but you should also be aware of predatory lenders.
Unfortunately, there are lenders out there that try to take advantage of people with low credit scores. Often times these lenders will advertise loans with low-interest rates but will include a clause that will allow the rates to increase significantly later on.
This is a reminder to always read the contract and fine print. It may even be worth your while to hire a professional to look it over for you.
Moving Loan
Moving can be an expensive process, whether you’re moving down the street or across the country. It can be overwhelming even when you don’t have to worry about your low credit score. It becomes more stressful when trying to get a moving loan.
We want you to have the best moving experience possible and we know it can be hard to improve your credit score in time to get a loan. Our team of experts is available here to help you get what you need. Contact us today for all your moving loan needs.
