For those who have a bad credit history there are new options available for getting finance. You may have heard of
Bad Credit Bank Accounts; these accounts are specially designed for those who have less than perfect credit and need a way to obtain finance.
Bad Credit Accounts explained
These accounts have basically two purposes, they provide finance through pre-agreed personal Loans and they also help improve credit score. In order to make good use of these tools, you need to know exactly how they work and how to get access to them. Following are a couple of tips on this subject that you may find useful.
Bad Credit Bank Accounts are just like any bank account, the only difference is that certain banks, smaller ones, have fewer requirements than others and thus make available this kind of account packages for people with bad credit. What makes these accounts good news is even better news for those with a bad credit history who are unable to get finance.
These accounts are savings or checking accounts that also include the possibility to retrieve money from the account even if there is not enough money on it. The bank automatically lends the money and charges an interest on it. However, the amount you can retrieve is small, usually around $1500.
Pre-agreed Personal Loans
What makes these accounts special is that they come with a
pre-agreed Personal Loan. This means that whenever you need to, you can borrow a larger amount of money, usually up to $10000 or more without doing any paperwork. This is possible because the bank has already done all the credit verifications when you obtained the bank account. In fact, you can even obtain the money via the ATM.
When you obtain the account you'll get all the information regarding these loans. Usually to keep it simple, they'll show you the monthly installment amount you'll have to pay every $1000. This amount includes everything: principal, interest, administrative fees, insurance, etc.
Pre-Agreed personal loans are unsecured loans, but the interest rate associated with them is lower than stand-alone personal loans, mainly because many fees are already being charged with the maintenance of the account. Thus, you are getting more services for the same or less money.
Credit Repair
Another benefit that comes attached with these accounts is that both the account and the pre-agreed personal loan contribute to
rebuild your credit. A regular use of both will slowly raise your credit score and improve your credit history. You may even get a good credit score in a small period of time, as the banks always inform credit agencies of your credit performance.
As a plus, some of these accounts will grant you either a secured credit card or an unsecured credit card depending on your credit score and history. But if you have bad credit, a secured credit card is not that bad as you'll be able to improve your credit faster because each time you pay the balance in full it get's recorded into your credit history. You'll then have three financial products regularly being reported: The account, the pre-agreed personal loan and the unsecured or secured credit card. It's a single combo with many benefits.
