What would you suggest to borrowers who are trying to get a peer to peer loan funded?
Unfortunately, if your credit score is below 520 FICO, it’s going to be difficult getting any type of online loan. Here is the process I recommend to boost your credit score fast and get a loan.
- as possible. This is the worst kind of debt and the one that hurts your score the most. Paying down your balances alone can bump your score 20 – 30 points higher.
- Try getting a few of the bad marks or accounts wiped off your credit report. This https://worldloans.online/installment-loans-nj/ involves writing the credit bureaus to contest a missed payment or other bad mark on your report.
- Apply for a smaller loan with a shorter-term. You’re much more likely to get approved on a loan for a few thousand dollars with a one-year or 24-month payment term than a much larger loan. Getting a smaller loan and paying it off early is not only going to increase your credit score but lenders are much more likely to approve loans to repeat customers.
Peer-to-Peer Loans FAQ
Over five years running this blog and using peer to peer loans myself, I’ve seen several questions come up most often. These are the common questions everyone has about peer lending and that really help you understand the basics.
For borrowers, it’s always smart to start out with a small loan, like in the $3,000 dollar range, pay that loan off over a period of a year or two, and then apply for a bigger loan the second time around. Lenders like to see an established payment history with large loans (all the way up to $35,000) having a much greater chance of being funded.
Can I get a personal loan with a 500 credit score?
A 500 credit score is deep into bad credit but doesn’t necessarily mean you can’t get a personal loan. Apply on a few of the bad credit loan sites but make sure you can afford the payment before you accept any loan. If you are denied a loan, you likely only need 30 or 40 more points on your credit score so focus on paying down credit card debt and disputing bad marks on your credit report.
Can I get a personal loan with a 660 credit score?
Yes! A 660 credit score is right at the cutoff for prime lending, the score at which banks and credit unions start lending to customers. It’s at this point that you’ll notice more offers for loans and credit cards because you’re breaking into that ‘good’ credit range.
How do I increase my credit score for a bad credit loan?
I share five credit hacks I used to boost my FICO by hundreds of points in this video but there are a few things you can focus on.
- Pay down credit card debt. That might mean getting a debt consolidation loan now, to pay off your cards and increase your score. Then getting a loan for the rest of the money you need in a few months.
- Get an increase in your borrowing limit. This sounds weird at first but makes total sense. By increasing your borrowing limit on credit but not using it, you’re lowering your credit utilization ratio. It’s an important measure in your credit score and can boost it by a few dozen points fast.
- Change the reason you’re borrowing money. This won’t increase your credit score but using the ‘debt consolidation’ reason in loan applications usually means faster approval compared to other loans.