Payday loan companies are considered “essential businesses” in various states and many other states during the COVID-19 outbreak. As cities and states continue to shut down their nonessential businesses, what is considered essential will likely vary based on the needs of each location. But businesses that people rely on in everyday life will largely remain open. We are hoping to help you maintain your life and that of your family’s using personal loans, installment loans / cash advance loans or payday loans.
Nonessential businesses are generally recreational in nature. They don’t provide groceries, health or financial support, or utilities. Restaurants fall in this category, but most locations have allowed restaurants to continue to operate as long as they close dining rooms and switch to exclusively take-out and delivery.
Nearly 80% of Americans stress out about overspending for Christmas or the holidays, according to a 2018 Credit Karma survey — and there are lenders that market loans for the holidays specifically for that spending.
If you haven’t saved — or haven’t been able to save — for the holiday spending you want to do, and you’re thinking about taking out a Christmas loan, here are some important things to consider, and some other options to look at.
If you’re set on borrowing for the holidays, here are a few things to consider.
Planning ahead for the holidays and budgeting for your expenses is the best way to enjoy the season while avoiding a holiday financial hangover. But that’s not always possible — life happens, and sometimes basic necessities cut into our holiday budgets.
While a Christmas loan may allow you to spoil your family, it’s financially healthier to budget and set money aside for holiday expenses if you can. Start today by stashing some holiday cash in a designated savings account. You may even enjoy the holidays a lot more knowing that you can ring in the new year without added debt.
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Sorry, your loan application was not approved; please contact customer care or visit the nearest office for further instructions. This is the message you get when you have applied for a loan from a financial institution. Well, here is where the credit score comes in. For you to access loans or credit, a report is needed.
It’s generated from your accounts to show how you manage your money. The report is then used to calculate the probability of you paying back the loan.
This explains why you are asked to provide financial records before a loan is approved. The banks and lending apps will pull your financial statements first before being allowed to proceed with your application.
The moment you get your first credit card, a profile is created. This will be a road map towards accessing new credit cards or loans. The profile is then used to classify your score.
The profile is sent to the credit bureaus, which analysis your account transactions to determine your creditworthiness. Some people have these profiles but are not aware since they are registered under a guardian or a parent name. Others wait until the age of 18 years to be given a credit card.
Determining your credit score goes deeper than weighing your credit history. The process involves weighing and comparing your information to other borrowers.
The credit performance of an individual plays an integral part in determining the payment pattern as well.
It refers to the types of accounts that make up your credit score. It also determines 10 percent of your score. This includes mortgages, automobile loans, student loans, and credit cards. The records from each of the accounts are analyzed to calculate your payments history. The evaluation includes how fast you pay your loan, and the duration taken.
Do not apply for a loan to increase your credit score, but rather apply when a need arises. The credit bureau uses this information to tell if you are an aggressive borrower or not. If regarded as an aggressive borrower, then it’s a red flag for you.
It shows that you are incredibly dependent on loans to satisfy your needs and wants. And it’s predicted that at a particular point, you will default. This is a loss to the organization. Therefore they will come after you and auction your property to recover their finances. This is something I wouldn’t want you to pass through.
It is the process of evaluating the creditworthiness of an individual, firm, or Government. When either of the parties decides to apply for a loan, they have to show their credit rating. This helps the lenders to tell how fast loan can be paid and the duration to be taken
The individual credit score is processed by credit bureaus such as TransUnion and Experian on a three-digit score. The score represents your credit rating and credit history. It ranges from 300, which is the lowest to 850, which is the best record that one can have. The cluster is broken down to
Excellent : 800 – 850
Very good : 740 – 799
Good : 670 – 739
Fair : 580 – 669
Poor : 300 – 579
The governments and companies have their evaluation done by Fitch, Moody’s, and Standard & Poor. The agencies are in charge of determining their credit rating before being approved to continue with the process. The parties are to take care of the cost implications the agencies will incur during their evaluation.
It is an important task that should be undertaken with a keen eye. This is because it determines the interest rate at which the loan applied for will be repaid at.
Factors that affect credit score
Various variables will affect your credit score. Therefore I recommend that you look into the following aspects.
It determines 35 percent of your score. How fast you pay your loan impacts your score. This does not mean if you delay paying once in a while, it will affect your score. The problem starts when it becomes a habit.
It is essential that you pay the loan in time to avoid adopting this trait. Most creditors are hoping that you default and then they add interest rates. This will benefit their firms, and on the other hand, you end up paying double the amount borrowed. To be on the safe side of the score, ensure the payments are made on time.
With age comes wisdom and experience; this applies to the credit card as well. The lenders prefer an older account compared to a new one. This is because it shows you have a lot of experience and wise when it comes to handling debt.
Closing and opening new accounts affects the score, and this is something you would like to avoid. Age of the credit contributes 15 percent on the score as well and improves your chances of getting a loan. I would recommend that you stick to the old accounts instead of opening a new one.
It has a 30 percent ration in the score as well. It’s the total amount of credit you have on your head and yet to clear. Your credit limit and balance have to be in check to ensure that you maintain your perfect score.
Having a lot of debt will affect the score, and you will be branded an aggressive borrower. The tag is a red flag to any creditor. Hence they will not approve your loan request since you’re likely to default. Your income will not have a positive impact on the loan request at this point.
There are three types of credit accounts that you can have. These include revolving, installments, and open accounts. Having them in your profile will boost the score by 10 percent. This is because it shows you have experience in managing various debts.
It is also an advantage to have various loans such as mortgage or car, student, personal loans, or even a bad credit cash advance.
Applying for a new loan is normal in life today. A red flag is raised when there is a sudden spike in the requests. When credit bureaus notice this behavior in you, they will always turn down your request.
For example, if you apply for a loan in three months consecutively, it will paint a bad picture and even reduce your score.
I would recommend that you apply for these funds when there is an urgent need. And if it’s a must you seek for new credit, make sure you take time before requesting for another one. The duration should be between three to six months.
At some point in life, we are rendered unemployed and have to find ways to survive. Though there are unemployment benefits we enjoy during this phase, it is not enough. You will have to head out and look for other ways to make ends meet.
The good thing about this phase is that the credit bureau doesn’t know you are unemployed. But they will notice the reduction in your income, which will affect your score. I would recommend finding other avenues of income to maintain the rating.
A lien refers to a claim that is placed on a property or something until the loan is paid. A good example is a car loan. The institution has a right to prevent you from selling the car until the loan has been cleared. This kind of agreement harms your score. It will only increase once the debt has been paid.
It is crucial that you always check your credit reports and fix the error as soon as possible. Not evaluating your statements will cost you a bit of cash as well as decrease in your score.
The credit reporting agencies also make mistakes. It is up to you to check if your records are clean and error free. I would suggest that you do the checks annually to be on the safe side.
The number of credit cards you have does not show how good you are at handling the debts. Instead, it portrays you as an overspender who is unable to clear their loans. It is advisable you maintain a minimum amount of credit cards. If you can do with a maximum of three or less, it will go a long way in improving your score. A poor credit cash advance may be an option for some borrowers using their credit card.
This the most damaging compared to other factors. If you have reached this point, it will be hard to climb out of it. It does not only affect your score but goes into your permanent record for a period of 7 to 10 years.
It is something that you should try to avoid. If it is unavoidable, opt for a debt settlement plan as it will help to maintain the score.