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Low Interest Rates May Not be Available to Bad Credit Score Borrowers for Now

By Sally Maison
Published: Monday, December 21st, 2009

There are many lenders across the United States who are willing to work with bad credit score consumers who are in need to borrow money. However, those who are looking for low interest rates might be out of luck. After the economy went down largely because of bad lending practices, creditors have changed their ways of dealing with consumers. At present, consumers with poor credit score will find it practically impossible to borrow at low interest rates, whether through loans or credit cards. But finance advisers say consumers should remain optimistic since there are many ways for them to borrow at lower interest rates in the near future.

Low Interest Rates May Not be Available to Bad Credit Score Borrowers, for NowConsumers whose credit score is below 650 will find it very difficult to get at low interest rate on any type of money they borrow. Those who plan to get a plastic anytime soon are most likely to be tagged with an interest rate well over 15 percent. Analysts predict that this will be the case for quite sometime since lenders know that they will lose profitability if they lend at low interest rates to consumers with bad credit score. Lenders believe that consumers with poor ratings are less likely to pay, so they are trying to minimize risks by charging them with higher rates.

With this being the case, finance specialists say the least that consumers could do is to improve their credit score. However, experts add that the only way consumers can improve their ratings is by paying their bills on time. Consumers who want to borrow at lower rates are advised to stay current on their plastic, mortgage, and other payments. Specialists tell consumers that they need an excellent financial plan in order to do so since juggling with bills do not work as well as they used to be.

Boosting a credit rating, however, could take several months to several years according to experts. Potential borrowers who repeatedly missed payments in the past are expected to take a longer time before finally regaining a good score. But experts also cite several options for those who are struggling with their ratings and are willing to borrow at high interest rates.

They note that there are several local and online lenders who lend to bad credit score consumers up to $15,000 in personal loan. Experts remind borrowers though that there is a strong likelihood of getting an interest rate of up to 20 percent if they have a subprime credit score, 620 or below.

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