For any type of short-term loan you might be considering to give you a quick financial boost, you want to secure yourself the best terms possible. Whether we’re talking loan amount, interest rate or several other factors, putting yourself in position to get a great loan term is vital for ensuring you’re able to repay it promptly and properly.
At 1st Choice Money Center, we offer a variety of short-term loans that serve as alternatives to payday loans, including personal loans, signature loans and title loans. One of the key factors in getting the best possible such loan: Having good credit. Let’s go over the basics on credit score and the factors used to calculate it, plus how credit history matters and why it’s vital to ensure you’re working with a reputable loan company.
Credit Score and Factors Involved
Your credit score is a number used by any financial institution that will potentially be lending you money, with the goal of weighing the risk of lending to you. Credit scores range from 300 on the lowest end to 850 on the highest end – the lower the number, the greater the risk to the lender. Your score is made up of several factors:
- Payment history (35% of your score): Whether you’ve been paying bills on time, have missed any payments, etc.
- Credit utilization ratio (30%): The percentage of your available credit that you’re actively using – generally speaking, you want to keep this number below 40%.
- Credit history (15%): How long you’ve had accounts open with a strong repayment history.
- Credit types (10%0: Mortgages, car loans, personal loans, credit cards, etc.
- New credit (10%): Don’t open several new lines of credit at once, as it can have a negative impact.
While we do have bad credit loans available, your potential for a great loan increases if you build up your credit history. Spend several months or years paying your bills on time and lowering your utilization ratio to give yourself the most available options.
Viable Loan Company
Finally, another important factor here is working with a short-term lender that is reputable and has a proven track record in the industry. Sadly, there are some in this world who are not trustworthy, including those who actively look to prey on those with short-term cash needs – this is often what happens with payday loan lenders in particular, and why we at 1st Choice Money Center go out of our way to provide alternatives to these often-harmful loan types. Working with a strong lender who cares about your needs and will help you get the best loan possible is vital.
For more on securing a great short-term loan, or to learn about any of our installment loan products, speak to the staff at 1st Choice Money Center today.