“A tree is known by its fruit. If it does not bear it will be uprooted and replaced. Those that do bear fruit will be nurtured so that they may bear more.”
The system of keeping credit records exists to weed out the lies and hollow promises of untrustworthy loan applicants. However it is also to reward the diligent applicant with favourable terms and conditions.
Credit providers have to have some way of keeping loans for bad credit at bay. Without this safeguard, economies will keep on collapsing into recession upon recession. It is important to know that trusted credit providers (NCR regulated in South Africa) are not trying to limit applicants by using their credit scores against them. So don’t get too angry and hate on the NCR! Credit scores help to identify the capacity of the applicant. Upon identification the capacity of an applicant can be nurtured with just the right amount of debt.
What does this mean for you?
The great thing about a credit score is that it is entirely up to you. You determine the value of your score. You are the master of your finances! You decide where and what loan to sign for. It is within your own sphere of influence to never have the need for bad credit loans.
The question remains though. Will a bad credit record stop you from getting a loan?
The straightforward answer is - no. There will always be some way to get a sum of money to repay with interest, but the dangers are the safety of those agreements. There’s more than one way to bake a cake. You can get all sorts of dangerous substitutes for safe loan practices.
“But high interest rates, loan shark tactics and hidden fine print sound like the ingredients of a mud cake (not safe for the health of your debt).”
Such decisions will most surely lead to bad credit personal loans.
Applying for a loan without the regard of your credit score should make your alarms go haywire! If the credit provider gives minor heed to your credit score and all the focus lies upon your signature - proceed with caution. Surely it means that the credit provider is only concerned about squeezing as much money out of you as possible?
A bad credit score will not stop you from getting a loan. But it will stop you from getting the loan you need. The bad credit scores will be overlooked, and the good credit scores will be nurtured.