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Having a fair credit means you are in the gray zone and is in between poor and good credit. So basically, an average credit score. You don’t want to stay on this zone as one slip-up means you’ll be on bad credit territory, but until then, you’d have to dig for the best personal loan deals you can find.

And that is what we’re trying to do, we’ll look for the best options available for people who have fair credit and also how to improve it.

Best Places to get a personal loan while having fair Credit

Having a fair credit is like a tough balancing act, either you make it or you fall down to having a bad credit score, it all depends on how you manage your debts. Getting a personal loan will entirely depend on choosing the right lender and how well your other credentials is.

Banks and Credit Unions

Most banks and credit-unions are perfectly fine giving loans to people with average credit, as long as it doesn’t fall below 620, everything is good.

But the better choice of the two would be credit-unions though, since they are owned by members and are a non-profit organization, which usually means they have lower rates compared to banks.

P2P or Peer-To-Peer Lenders

When going for an unsecured loan, peer-to-peer lenders would be the best lender to go to. They offer a variety of options for people who has bad, fair, and good credit scores. You just need to show them that you are more than capable of paying what you borrowed.

Documents usually asked of you when having a Fair Credit

Doesn’t matter where you’re applying to, these are the most common requirements that lenders will ask of you.

  • Proof that you are receiving a monthly income.

  • Social Security Number or Proof that you have a social security income.

  • Tax Returns

  • Bank Statements

How to improve your Credit

You don’t want to stay on having a fair credit, it’s a risky place to be, you’re a step away from having a good credit which has tons of benefits. From having good rates, more options, lower repayments, and more.

These are the things that you can to do move your credit score up.

  • Know that improving your credit score will take some time, so don’t rush. Don’t get loans with the goal of improving your credit score.

  • Don’t use any credit repair service, you’ll be doing most of the work anyways.

  • Don’t miss any payments, if you have any history of missing out on payments, that’s one thing that you need to work on.

  • Fix errors on your credit. You can get a free credit report yearly, use that to check and correct errors if you see one.

  • Pay off any existing loans.

When you take out a loan, you always start with doing your best to get your payments made in full on time. However, circumstances can change and your financial situation can turn to worse, making it more difficult to afford the loan repayments. If this happens, you run the risk of missing payments or worse, find yourself defaulting on the payments. You are considered to have defaulted on your loan repayments if you have missed payments and failed to repay the amount required for three to six months. Different lenders might have their own policy when it comes to when they will consider a loan on default. But if you continually miss payments, you will eventually end up defaulting on a loan. 

Defaulting on Loans - What Will Happen?

Typically, if this is the first time that this has happened, you might receive a letter from your lender informing you of the situation and warning you of the possible actions they might take if you will refuse to make the payments. If this persists, they have the choice to get the debt passed to a collection agency or take court action. If you signed up for a secured loan, some lenders may start the process of repossessing the collateral attached to the loan. 

Not only are you going to risk losing the asset used to secure the loan, expect that the default is going to be reflected on your credit report too. As a result, your chances of getting approved for loans and credit cards in the future will suffer too. This is the reason why when it comes to loan repayments, it is never a good idea to miss on repayments. This is also the reason why people are always advised to consider how much they can conveniently afford to pay back before taking out a loan. Otherwise, they will only find themselves in a financial quandary if they do not manage their loans right. 

Get The Money You Need

Apply to Borrow £1000 to £25,000*

 

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