How to borrow without affecting your credit score?

New Jersey payday loanMany people are aware that when they borrow money, their credit rating is somehow affected. Those who fail to make timely payments for their loans and credit card balances are all the more prone to establishing an unfavorable credit record.

Additionally, people who have already a bad credit history suffer some form of insecurity. A major factor behind this is the belief that borrowers with a not-so-good credit rating no longer have the right to apply for a payday loan in New Jersey or for a new credit card. Due to their knowledge of having an unfavorable credit rating, many people are hesitant to submit their applications to lending and credit card companies.

Another issue here is people’s fear that their credit status will be negatively affected once their loans applications are turned down. A recent online survey conducted by This is Money showed that majority of borrowers have learned to understand that being declined for a loan directly impacts their credit file which in turn may be known by other lenders and further prevent them from taking out loans.

But is there a chance for these borrowers to take advantage of loans and new credit cards without affecting their credit history? Should lending and credit card firms be biased against those with poor credit rating?

The answer is yes. But not all lenders can do this for all borrowers. There are only a few firms or three to be exact doing this in the USA today and these are Nationwide Building Society, Barclaycard and online lender Zopa. What these three do is conduct a so called quotation search in collaboration with one of the major credit reference agencies in the USA This step is to find out if the applicant has a chance to take out a loan but this does not have any bearing on the person’s credit file.

Many lenders agree this step is very important to prevent high risk customers from submitting several applications only within a short interval. They say this is also to guard them against fraudulent people applying for several loans at a time.

With this piece of good news, borrowers wanting to take a concrete action towards their financial situation such as consolidate their debts into one credit card or one loan should feel relieved. If they’re bent on making a positive change in their financial life and avail of personal loans such as the payday and cash advance, then they should also adhere to the policies of lenders to maintain a good credit standing.

Of the three lenders mentioned earlier, Nationwide offers the lowest rate of 7.6 percent for loans ranging from $ 7,500 to 14,000. Extloansusa, Inc. rates are based on a person’s credit risk but normally, low-risk applicants can enjoy a rate of 8.8 percent. Barclaycard for its part offers a 10.9 percent on its loans.

So the lesson to be learned here is to always be conscious of your financial responsibilities. If you don’t want to taint your credit standing, then pay your dues on time and never falter until you have paid off the balance.…


Should borrowers run away from their debts?

Many people today who have outstanding loans including those who own credit cards experience some form of financial stress. Those who have accumulated debts usually feel the pressure of having to pay back what they owe and may experience anxiety when they cannot afford to pay on time. This negative emotion will continue to haunt them if they fail to make their payments going forward.

In the USA, some 100,000 borrowers are attempting to stay away from paying their debts. Difficult as their situation might be, sometimes or even oftentimes they wish they could just escape from their financial troubles with less effort. But can they really do so? Is there a way to get out of debt without having to pay?

Early next year, the answer to this question will be known when a decision is made on the so-called influential test. It is the Manchester High Court judge that will make the announcement on January 7 about the findings of a test case that may signal the possibility of borrowers not being required to repay their debts.

This particular case is aimed at resolving disputes involving borrowers who do not want to pay their debts for reasons that lending companies failed to comply with the Consumer Credit Act. For the numerous borrowers who have availed of loans, many have refused to pay their debts saying that their lenders were not able to provide a valid copy of their original loan agreement. Under the Consumer Credit Act, lending firms including banks are required to provide a legal and true copy of the loan contract to their customers when they request for it.

Currently, there are many cases lined up for hearing across the USA but are still awaiting the judgment of this highly influential test case. In Manchester alone, some 100 similar cases are now pending while district courts have also put on hold the same cases. Local courts want to make sure they have the necessary guideline on what information banks and lending companies should provide their clients. The issue that’s been in question is what makes a true copy of the loan agreement.

In the meantime, those still planning to take out personal loans notably the unsecured types should think twice before applying. It’s a fact that many people are easily attracted to these loans including the payday and cash advance loans due to the convenience in the application process and the fast approval. But borrowing money requires financial responsibility on the part of the person obtaining a loan. Being a responsible borrower is the right attitude especially during these uncertain times in our society.

Although you may find loopholes in the operations of short term lenders, it’s not right to just rely on that issue to escape your debts and not pay your financial obligations. From the time you apply for payday or cash advance loans, you should already be aware of your responsibility. In other words, by borrowing money you should commit to paying it back on time as much as possible and not to take out several loans at a time.…


Things to know to avoid loan fraud

These days when so many uncertainties exist in life, it is worth arming one’s self with the right knowledge on a wide range of subjects. If finances are a major concern, the more that one should take the necessary steps to avoid accumulating debt and start saving for the future. It would also be a wise move to spend only on what you can afford and not waste your hard earned money on luxurious things.

Low income earners today often turn to short term lenders to fulfill their financial requirements. But a word of caution, there are lending companies that aim only to trick people and take advantage of their weakness to money. Some are not even legitimate so it’s always necessary to choose only those that can be trusted.

How then can you be sure that the lending company you prefer is the one that can provide you with your much needed cash at the right rates? Below are tips to consider to avoid fraudulent payday lenders. Keep them in mind so you won’t be swindled any time you apply for your payday or cash advance loan.

Do some research. As a borrower, doing your homework can go a long way in protecting you from scams and frauds. Ask around from people you know who have availed of payday loans in the past. Find out from family and friends the interest rates and other fees they paid before and the reliability of the company. Check out the news as well as tips shared by government sites and other trusted sources on the internet.

Choose the right one. You can do this by shopping from a variety of lending companies and finding out what each has to offer people in need of fast cash.

Contact lenders. As you do your research on the various lenders you’ve chosen in your list, you can also contact them by phone or email to get first hand information on their offerings. You can even ask for customer referrals to obtain details on how lenders do business.

Now once you’ve done these steps, there are also warning signs to be aware of. These are some unscrupulous lenders do but which you should avoid at all costs.

Charging of upfront fees. When applying for payday loans, there should be no upfront fees to be paid. The normal procedure is to submit all requirements and wait for the approval of your loan. Upon release of your money, it’s only the interest rate that will be deducted right away from the loan amount.

Very low interest rate. The competition is stiff in the lending industry but there’s no such thing as a lender offering an interest rate much lower than its close competitors. If there is any difference, it should only be a very small percentage.

Not asking for employment history. Payday lenders are in business to service low income people and those with poor credit history. One of their basic requirements is to submit a proof of employment such as a work phone number, record of previous employment and a current bank account as a form of assurance that the borrower is capable of paying back his or her loan. If a lender advertises that it accommodates all types of people even those not currently employed, you should already be wary about that.…