Ever been denied a loan because of your creditscore? If you’re not sure where to look for thelowest personal loan rates for YOUR FICO, you’re in luck because we’re talking aboutrates for different credit scores.
We’ll talk about four different credit scores,the best loan sites for that score and how to increase each score fast to get betterrates.
All here right now on Let’s Talk Money.
Joseph Hogue here on the Let’s Talk Moneychannel.
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So all of the personal finance and loan adviceon the internet is that general ‘how to get a loan’ or how to increase your scorebut it’s so hard to use the information because it’s not really applicable to yoursituation.
A lot of the advice isn’t going to be thesame or isn’t going to work if you have a very low credit score.
Other information won’t be the best if youhave a very high score.
To really take advantage of the financialsystem, to get everything you can out of personal loans and get the lowest rates, you have tolook at the facts around your specific credit score and that’s what we’re going to dotoday.
We’ll cover the best personal loan sitesfor four different credit scores and some tips for each level that will help you getbetter rates.
We’ll start with the lower credit scoresbut keep watching because each level is going to offer some great ideas on boosting yourFICO to get better rates.
I’ll be linking to each of these sites inthe video description below so you can get more information.
Let’s start with a 580 FICO score.
This is deep into the sub-prime credit somaybe you’ve got a bankruptcy or have missed a few payments.
None of the banks are going to lend you moneyand most credit cards will be charging rates of 28% and more if you can even get approved.
What you want to focus on here is fixing thethings on your credit score that you can control, especially the things that are really goingto increase your score.
That means getting any errors removed andmaybe even getting a few missed payments wiped off by filing a dispute with the credit bureaus.
I’ve got a video that walks you throughthis dispute process and includes a template of the letter you want to use when dealingwith the credit bureaus.
Another place you’re going to want to startis with a consolidation loan.
If you’ve got high-interest credit carddebt, that is ruining your credit score.
The credit bureaus don’t like to see creditcard debt because it doesn’t have a payoff date and the payments aren’t fixed.
That’s why it’s called revolving debtas opposed to non-revolving debt like with mortgages and other loans.
So what you want to do is take out one personalloan to pay off those credit cards.
This will replace all those debts with oneloan, save you money each month on interest and change your debt to a fixed-payoff non-revolvingcredit.
This first personal loan site is one I’veused a few times.
I used it when I destroyed my credit yearsago after the housing bust and they specialize in bad credit personal loans.
The site is called PersonalLoans.
Com, it’snot a peer-to-peer lending site but an aggregator where lenders all come together to bid onyour loan.
You can get personal loans, peer loans andeven bank loans on the site so it’s a great way to shop your loan around for the bestdeal.
Rates on loans at this credit score are stillgoing to be high but usually lower than credit card debt so you’ll save money on interestpayments.
Now if you have a 650 credit score, that’sstill in the sub-prime range but it’s getting better.
Banks still probably are not going to giveyou a loan but you have more options online and with peer lenders.
Working on your credit score here is aboutworking with what you have.
One trick that works great is getting thelimit increased on your credit cards.
Now this sounds crazy but it works becausepart of your score is what’s called the credit utilization ratio.
That’s just a way of saying how much youowe versus how much you can borrow.
Think about it.
If you owe $5,000 on a $5,000 limit then you’remaxed out.
That looks horrible to a new lender but ifyou owe that same $5,000 on a $10,000 limit then it doesn’t look as bad.
You’re only using half of your availablecredit.
Getting your credit limit increased isn’tan excuse to go out and shop but it will help you increase your credit score and get betterrates.
One personal loans site I like for that 650credit score range is Upstart.
This site is great for college graduates andpeople that don’t have a credit history or that have a low score because it uses aspecial lending model that takes other factors into account.
If you have a 700 credit score then congratulations,you’ve made it to the prime-lending category.
Here is where you’ll start qualifying forbank loans and better rates online.
You might still have trouble getting an unsecuredloan from a traditional bank but you’ll qualify for good rates from the peer-to-peersites like Lending Club.
With a 700 credit score, just little improvementsin your FICO are going to make big differences.
Paying off a couple of smaller debts or creditcards will really help increase your score.
So a lot of people know about the debt avalanchemethod of debt payoff where you pay off your higher rate debt first but there’s anotherdebt payoff strategy here you might consider.
The debt snowball method means ranking yourdebt by amount owed, with those smaller ones at the top.
You still make all the regular payments butyou make extra payments to those smaller debts and pay them off faster.
It’s a great way to stay motivated, seeingthose debts drop off your list and will help improve your credit score fast.
Lending Club is actually the largest peerlending site in the world and offers some really low rates on personal loans for goodcredit borrowers.
I actually invest in loans on the site andtheir cutoff for loans is 680 FICO so you’ll just be coming in under the wire.
One note to make here, I recommend differentsites for different credit scores but there’s no harm in applying on several sites to seeif you can get a lower rate.
The loan sites do what’s called a soft checkof your credit first and it doesn’t affect your credit score.
It’s only after you accept a loan that itgoes on your credit I’ll link to these sites in the video description and check a few outto make sure you’re getting the lowest rate possible.
Finally, here is a 740 credit score.
This is well within the prime-lending categoryand you’re going to start noticing rates are going lower fast.
You should be getting interest rates on loansthat are just a little above the teaser rates they advertise.
With a higher credit score, there isn’tas much you can do to increase it other than just make monthly payments on your debts.
There isn’t much wrong with your score atthis point, you just need to build it over time.
A high 740 credit score will qualify you forloans from banks and the stricter loan sites like SoFi.
This site offers the widest range of loansavailable from student loans to mortgages, car loans and personal loans.
Because it only accepts very high credit scores,rates are some of the lowest in the business.
That’s your best options for the lowestpersonal loan rates and a few tricks to increase your FICO.
If you can wait a month or two for your loan,you can always increase your credit score a little to get to that next higher leveland decrease your rates.
Otherwise, each of these personal loan sitesis a great choice for getting the money you need.
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