Personal Loans and Credit Repair

Posted by admin on Friday, December 25, 2009 · Leave a Comment 

Borrowers who repair their credit may boost their chances of qualifying for a personal loan. It’s important, however, to avoid quick-fix credit repair schemes. In many cases credit counselors offering super fast results may be running a scam.

Credit Repair Scams

A Federal Trade Commission (FTC) survey found that about 2.1 million people were taken in by credit repair scams. Many of these counselors claim they can get negative information deleted from an individual’s credit report, which isn’t true, according to an article at Military.com.

People who want to repair their credit before applying for a personal loan should be skeptical if a credit counselor tells them to:

Create a new credit identity
Avoid speaking to credit bureaus
Pay money upfront to receive help

Credit Repair Checklist

Many people can probably put together their own credit repair plan. Anyone needing help should carefully vet any credit counselor before signing up. Important things to find out about a counselor include:

The name, address, and phone number of the business
What services the company offers
What fees are involved and how they are structured
Will they give the individual time to read through the contract before signing up

Loans with Better Interest Rates

The best interest rates on loans go to people with higher credit scores. That’s why it pays to repair your credit before applying for a personal loan. Although it may be tempting to apply for personal loans with bad credit, it’s tough to get one of these deals without paying high interest. Furthermore, depsite all the ads offering personal loans with bad credit, many lenders just aren’t willing to loan this type of money in the current economic environment.

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