When you have a “bad credit,” it means you have a low credit score as tallied by credit reporters. In Australia, various credit reporting firms (e.g. Dunn and Bradstreet, and Veda) record data regarding your previous employment, debts, and financial contracts. When applying for bad credit loans, lending institutions will ask for data from these credit reporting firms.
Potential red flags on your credit report include the following:
- Credit defaults
- Missed payments
- Part IX debt agreements
- Previous bankruptcies
The more you ticks you have on the list above, the lower your credit score. With this, you are perceived as a risk to lending institutions; thus, they provide you with loans of higher interest rates.
Signs That You Might Have A Poor Credit Rating:
- You get various letters from debt agencies
- You get various phone calls from debt agencies
- You have various unpaid bills from one or more service providers
- You have credit card defaults
- You have overdue balances
- You have Notices of Assessment given to you by debt collectors
If you know that you have a low credit score, then loans for bad credit holders is the best option for you. You can still avail of various types of loans for every need you might have. These include car loans, business car loans, personal loans, boat loans, and home loans.
Searching for the best option out there is still possible even though you have a bad credit rating. Having bad credit doesn’t mean it’s the end of the world. You have to search the best non-conforming or specialist lenders out there and choose the option that best suits your needs. However, don’t make too many inquiries or applications at once at this can affect your credit rating negatively.