In Nigeria, the Credit bureau institutions provide credit reports on bank customers. These reports are based upon the credit behaviour or activities of bank customers. Poor credit history can negatively impact your bank’s reputation, which could make it more difficult to obtain a loan in future.
It is important to maintain a high credit score because the Central Bank of Nigeria is currently working on rules that will make loans impossible for those with poor credit histories.
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What are bad credit loans?
Bad credit is a low credit score, or a poor credit history.
Bad credit loans are available for those whose credit has suffered from financial missteps, or who don’t have the time or ability to build credit histories. These loans can be secured (backed up by collateral such as a house or car) or unsecured. Lenders can vary the terms, interest rates, and fees for these loans.
Many banks, credit unions and online lenders offer loans for those with poor credit. However, the threshold that is considered “creditworthy borrower” varies from one institution to another. You should shop around when searching for a loan. Some lenders have more stringent requirements than others.
What are some common errors that could lower my credit score
These are common mistakes that can lower credit scores with banks.
- Late payment of bills
Your past payment history is one of the most important factors in determining credit score. Although a few late payments on credit cards, loans or other obligations may not cause significant damage to your credit score, a pattern or mistake can make it count against you.
- Not paying minimum
Your creditor will report your account as being past due if you fail to pay the minimum amount. This can cause damage to your credit score. Paying less than the minimum amount can lead to late fees or additional interest charges, which can quickly add up.
- Too high levels of debt
Potential creditors might be hesitant to lend you money if you have multiple loans from banks or you are “maxing out”, or owe more than you can afford on your credit card. This information is also used by creditors to assess loan approval and interest rate charges. Higher interest rates are used as a compensation for higher risk.
- In financial documents, you are not allowed to use your full legal name.
Your credit history is made up of documents such as credit applications, bank accounts, and other financial information. Many of these documents are not identifiable. Your full legal name is a good way to ensure that your information appears on your report.
Even if your credit score is not perfect, you can still get loans. Although your credit score may prevent you from receiving a high Annual Percentage rate, you can still find interest rates that are lower than what you would likely find with payday loans.
What are the best ways to get bad credit loans
Many online lenders and banks are making adjustments to their personal loan offerings due to COVID-19.
There are many providers of bad credit loans. These loans offer affordable interest rates and easy services. These loan providers include
- A loan aggregator
- Peer-to-Peer lenders(P-2-P)
- Flexible credit scores are required for personal loan lenders
Conclusion
A person with bad credit history is likely to have a difficult time getting a loan. There is still a chance that you can get a loan even if your credit score is not good.