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How "Just a Number" Credit Score Really Impacts Real Life

[Jul 30, 2009.]


Credit score is a main determinant of whether or not the unsecured personal loan will be granted, and at what cost. It's only logical that the lender is interested in the borrower's history of paying back his or her creditors.

After all, with an unsecured personal loan, trust is the only collateral the lender has.

Unsecured Personal Loans in a Time of Need

Too many people don't realize how important a good credit history is until they really need a loan and can't get one, or can only get a very high interest personal loan. This is in stark contrast to a borrower with good credit, who can usually get an unsecured personal loan of $2,000 quickly and at an affordable rate and terms, such as a fixed rate personal loan at 9 percent.

That $2,000 loan may not seem like a huge amount in the so-called "grand scheme of things," but real life isn't always a grand scheme. For a borrower that needs to make rent, repair a car so as to get to work, or ride out a period of unemployment, that $2,000 can be a life-saver.

Credit Score Concerns Seem So Far Away, Then Suddenly Here

Credit score is a great example of something that seems far away, but then all of a sudden matters immensely. This leads to some unfortunate situations, when people see their dreams of buying a new car or new house vanish because of a number.

Realizing sooner rather than later that a credit score, from the lender perspective, is not merely a number but a story, is the best thing anyone can do in preparation of seeking a personal loan.

What story does that number tell? It's hugely beneficial if the borrower can shape that story into one that shows borrower responsibility. Or, if there were times in the past that creditors were not paid back, think about making an effort to correct those problems, either through repayment or by being prepared to explain exactly why a particular loan went bad. Explain, too, why things are different now.

Credit Repair Services and Debt Consolidation

People are only human, and it's natural to make mistakes. With approximately one trillion dollars of credit card debt outstanding, it's no shock that credit mistakes are common mistakes.

The key is to, once mistakes are found, once a credit score has taken a dive, don't give up. Credit repair and debt consolidation are two options that can help a credit score rise again.


About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.

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