In today’s world a good credit score is more important than ever before. A bad credit score can affect everything from your monthly car payments to your mortgage rate. If you’re already having financial trouble, a poor credit score can have a negative trickle-down effect by increasing how much you have to spend each month, which in turn affects your ability to keep your credit score high.
An especially frustrating part of credit scores is how easily they can be tipped negative by incredibly minor mistakes. Missing a credit card payment by just a few days will hurt your credit score, and so will having high credit card balances. The world of credit scores is an unforgiving one with a long memory, so what can you do to protect yourself? One option that you may not have thought of is a signature installment loan.
Signature installment loans can help protect your credit score in a couple of important ways. The first is that they are easy to qualify for, meaning your credit score doesn’t have to be squeaky clean to be considered for one. Because of this they also won’t charge you at a higher interest rate just because of your credit score.
Another way they shield your credit score is that if you have trouble paying one off or default on it, a signature installment loan won’t negatively impact your credit score. If you’re worried about maintaining or rehabilitating your credit score, this aspect of signature installment loans is important.
Next time you are facing an unexpected expense or other type of financial emergency you simply don’t have the cash for, think about this: is it better to put it on a credit card, or use a signature installment loan? If you’re trying to protect your credit score, then choose the latter. That way if it does take longer to pay back then you expect, you won’t be in the position of it negatively affecting your credit score.
Another way these loans are useful is when you need to consolidate your bills into one easy payment. Late charges and overdraft fees add up quickly, so why not give yourself the peace of mind and breathing room that one simple monthly payment can give? Nothing can bring up a credit score faster than being current with a zero balance on your accounts.