Getting a loan with bad credit

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If you had a difficult financial past if might be difficult to convince banks to lend you money. So how can you get a Loan?.


In order to make sure you have a good chance of being approved for your loan firstly you need to figure out if you would be considered to have a bad credit history.



Credit History 


In the Philippines there is no centralized credit bureau where filipinos can check their credit score reports. There are a few organizations that collect data and records of people with unpaid accounts and also the Banker's Association of the Philippines who have a database but it's not available to the general public.

So unfortunately you need to look back at your own history with credit cards payments, loans and mortgages and even payments to service providers for eletricity, water, cable, phone etc. Consider if you have been disciplined and paid on time always or paid late most of the time, or even worse if you not paid some bills at all. 


If you have outstanding debts that are severely overdue and late this could have a very negative effect on any futurue loan applications you make. It doesn't make it impossible to borrow money, but it will most likely mean you pay higher interest rates and have fewer options. 


How to improve your credit history?


Your credit score, which in the Philippines is more of a look at your current and financial history can be improved over time. Ensure all overdue payments with banks, lenders and service providers are paid and up to date. On all current debts, make sure they are paid on time each month, this will build your reputation as you demonstrate to the lender your financial responsibility. Don't apply for too many credit cards or loans at once, this can also effect your chances of being approved. 


What Type of Loan can i apply for?

if you have bad credit the lender will peceive you as greater risk and therefore might charge you higher interest rates, making borrowing more expensive for you. You might also be given more restrictions and required to offer up more collateral. 


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