How A Personal Loan Can Help Improve Your Bad Credit Rating
Using a personal loan to boost bad credit rating!
It seems counter-intuitive, and on first glance it even seems a little crazy. Why should I take out another loan to help improve my credit rating? Wouldn’t that just increase the likelihood of my credit rating deteriorating further?
While there are some risks associated with taking out a personal loan with a bad credit rating – especially if you do not have the resources to pay back the loan – there can also be benefits to securing a personal loan.
Consider how your credit rating is scored. First, it may seem obvious that your rating will only worsen, because you’re engaging in another channel of credit. This doesn’t go unnoticed, and will initially worsen your score because, of course, in theory you are loading more debt on yourself. However, should you pay back your personal loan in a timely fashion, your credit rating will steadily improve.
It could even make sense to take out a personal loan should you wish, for instance, to pay off a credit card bill in order to prolong and improve your credit rating.
As stated, at first it may seem counter-intuitive to try to use one loan to pay off another, and you really must think carefully about your ability to pay off a personal loan. If you can make steady monthly repayments however, you can use it to your advantage.
Having more lines of debt will harm your rating at first, but don’t worry, this will diminish over time, and will be ultimately rewarding should you make your repayments every month.
Why Loans 2 Go?
We specialise in personal loans, and have seen them used in multiple ways. Sometimes people want a personal loan to invest in a new car, are in need of an emergency loan for an unexpected bill, or perhaps for important maintenance to their home.
But there are other uses for personal loans like the one we’ve just discussed: using them to improve your credit rating.
If you’re still unsure about the merits of using a personal loan to improve your credit rating, why not give our trained Customer Service team a call and one of our expert representatives will be able to go through your loan options in great detail.