Bad or lower credit score describes borrower’s credibility with very high credit risk. Not necessarily a bad credit score proves that borrower does not have the intention to pay his/her liabilities. It might be due to his/her delayed payment or default/settlement on any of the credit line or due to wrong reporting by the financial institution. Often a person going through a rough patch in his life fails to make payments on time. Banks don’t take this into consideration.
Lendenclub’s automated credit assessment system tries to understand your historical payments in detail. If you have delayed some of your payments, our system will allow you to take a smaller amount of loan. This will help you to recreate your good credit history so that availing loans becomes much easier in future.
What is a bad credit loan?
Bad credit loan is given to individuals with a bad credit score. There are many reasons for which individuals may get a bad credit score:
- When you have missed or delayed your payments and did not pay within the same month.
- If your credit card utilization is high and you are serving it with a minimum amount of payment.
- If you have too many credit inquiries from various lending institution. With each inquiry, your score goes down.
- If you have less or no credit lines from any lending institution. It means your are New to Credit (NTC) customer.
Drawbacks of a bad credit score
Lenders are less likely to provide loans to an individual with a bad credit score because of a possible delay in payments. Due to this, getting a loan or credit card could become difficult. Many NBFC or Banks will reject loan applications. However, there are many lenders like LenDenClub, who provide loans even if you have a bad credit score. That is where LenDenClub’s bad credit loan comes into the picture. As long as you have no default’s after 2012, you can apply for a loan to fix your past credit history and later apply for top-ups and higher loan amounts.