The easiest way to improve your credit history is to apply for online payday loans in Louisiana through a microfinance institution (MFI). Using the services of such a company, you will not only be able to borrow a small amount online but also restore your financial reputation. It will take only a few months to correct your credit score.
What causes bad credit history?
Credit history may worsen if the borrower forgot to make payments on time, underestimated the importance of timely depositing funds, or overestimated his/her capabilities. As a result, the result is the same – credit history requires urgent correction.
Below are the most common reasons for a credit score drop:
- the borrower was in delay and did not use a loan extension service;
- the client took several payday loans and could not close them on time;
- the payer closed all loans but deposited money outside the due date;
- the borrower refused to pay the loan debt at all;
- the person took several loans and filed for bankruptcy.
The last two categories of MFI clients will be blacklisted. The path to re-lending will be closed for such consumers, and their credit score will drop to the red zone. Clients who delay payments due to financial difficulties or forgetfulness can easily get a payday loan Lafayette LA to correct credit history in one of the microfinance companies.
If you are late in payment for several days but have agreed on a deferral with the lender, the credit history will remain the same. The fact is that MFIs are loyal to consumers who have temporary difficulties and give them a second chance to pay the debt. However, there will be no third chance – if you deceived the lender, you will be charged penalties and fines.
Can you improve your credit history with payday loans?
To improve your credit history online, you must adhere to the following rules:
- Take payday loans from companies that transfer information to major credit bureaus – TransUnion, Equifax, and Experian;
- Pay off your loan on time, avoid early loan cancellation;
- Not get several payday loans at once but to pay them one after another.
Before starting the procedure, you’d better contact the credit bureau and learn your credit score. It is recommended to repeat the same procedure six months later in order to track changes.
Why choose a microfinance company?
If you have a poor credit score, there is no point in contacting a bank – large financial institutions are faced with an oversupply of customers, therefore, they decline applications of customers with a bad credit history. MFIs treat payers differently:
- You can close the debt at any time, as soon as you get money;
- If you have problems with repayment, the loan terms can be extended by paying interest;
- Almost all companies provide credit builder loans online when the approval is made by a computer program, without human intervention.
All records on timely debt closure are entered into the credit bureau database, which increases the borrower’s credit score among financial institutions. In 6-12 months. the rating parameters will improve.
How to apply for a credit builder loan?
First of all, you need to find a reliable lender. For this, you can use a loan referral service mylcu.net. To get connected to the right lender, you need to complete an online application. We recommend that clients with a low credit score start with the smallest payday.
The procedure for getting credit builder loans can be divided into several stages:
- Complete an online application form;
- Get matched with the right microfinance organization;
- Get approved and read the contract carefully;
- Get the funds and repay your loan + interest on time.
Next, you need to take payday loans 3-4 more times. The second application will be approved much faster since all user data will already be saved in the system.
For all borrowers, credit history is a clear indicator of the financial discipline level. The higher the score, the more trust the lender has. This increases the chances of getting a large loan. Even if you have made delays, do not be upset. MFIs will provide several credit builder loans and help you restore your financial reputation.