If you want to buy a home within the next few years, but do not have the best credit rating, consider getting a small loan to boost your credit. Many people assume that getting a loan will damage their credit because they think that it is telling lenders that they do not have any money, but that is not the case at all. Getting a small loan and paying it off on time can actually boost your credit dramatically. The guide below walks you through a few things you need to know about getting a loan in an effort to improve your credit score.
Find a Lender that Reports to the Credit Bureaus
The first thing that you need to do is to find a lender that reports to the credit bureaus when payments are made. This is an important step because there are some lenders who only report to credit bureaus when payments are missed, which will not help your credit score at all. By having the lender report to the bureaus when you make your payments, it will show that you are able to pay a bill on time and in full which shows reliability and trustworthiness.
Choose a Loan with Long Term Payment Arrangements
You want to get a loan that requires you to make monthly payments over a long period of time. This is important because you want to be able to show potential lenders that you are able to maintain the payments for an extended period of time because it will take you years to pay off your home and they need to be able to see that you are responsible enough to make your payments on time and in full. Choose a loan that requires you to make payments for six months to a year to ensure that you can truly establish that you are responsible with your debt.
Pay Off the Loan on Time
Be sure to pay off the entire loan on time. You want to be sure that you do not miss even one payment and that you pay off the entire loan by the specific date that the loan is due. This will boost your credit greatly because you will prove that you pay your bills on time.
There are many different options when it comes to getting small loans to use to boost your credit score. If you own your car, a title loan may be a great option to consider because you can take out a loan and put down your car as collateral. It is important to only take out a small amount of money to ensure that you can repay it on time so that you build your credit score and do not lose your car for nonpayment of the loan. For more ideas, contact a company like Community Resource Bank.
Hello, my name is Mark Thomure and this is a blog that I've written about the various types of money services that are available to individuals and business owners. For convenience and in the event of an emergency, it's important to know all the accessible options. Before these services are needed, it's important to find out about the various fees, requirements and terms. I've learned about the diversity of money services by doing research and speaking with professionals. Since many people don't know about the differences in these services, I thought I would make all the information available in this blog. After reading through the articles on my blog, you'll also be able to make informed decisions about the different categories of money services.