personal loans nz

Getting a Personal Loan for Bad Credit Borrowers?

Have you ever defaulted on a loan in the past? This can happen when you haven’t paid off a loan for more than 60 days. When this happens, your account will carry bad credit, making it difficult to get approved for more loans in NZ. It can also include part IX debt agreement, present bankruptcy, past bankruptcy, and maybe even with some defaults that you’ve paid off. Fortunately, you still have options to get a bad credit loan in NZ.

How does bad credit affect my account?

As bad credit makes it difficult to get applied for any further loans on your account, any bank conducting a credit inquiry on your account will be able to see the number of declined inquiries, showing them a bad credit history. In some cases, even multiple successful applications can paint a bad look on your account.

However, bad credit doesn’t have to spell the end of your future financial goals. If your bad credit is limited to only one default to any financial institution or bank or two small unpaid defaults to other companies, you may still apply for an unsecured bad credit loan in NZ.

You can also try going for a secured loan where you offer a physical asset as a guarantee for your loan. This works if you own something valuable such as a home or a car. These are all good options for when you need the money even with bad credit.

Lastly, you can try working with a cosigner with a good credit score. It’s an effective strategy to not only share the responsibility but to also help yourself build up a good credit rating later on.

Improving your credit score:

Of course, you’d still eventually want to improve and fix up your credit score. A good credit score allows you to apply for loans and financial services without the hassle. Start by sorting out the factors affecting your score the most and paying your bills on time. Your payment history tends to be a big contributor to your score so not missing any essential payments is key in establishing a good history.

After that, ensure that your credit utilization rate remains low compared to your credit limit. As a general guideline, try to stay at around 30% utilization of your limit. After that, it’s best to pay off any other loans before trying to accrue any new ones. If you’re finding it difficult, you can try snowballing your payments by tackling the most difficult ones first to make the process easier over time.

By avoiding applying for new loans, you also protect yourself from sudden inquiries as well.

Getting a guaranteed bad credit personal loan in NZ!

While taking action to improve your credit rating, you can always find other providers willing to lend you the loan you need in order to further your financial goals. Simply hop on to our free comparison page at CompareBear today to find the best bad credit loan options in NZ!