There are two cases of bad credit. Your recent history, that is, when you still owe the money and your "ancient" history, when it is old information which has not been updated, although the debts no longer exist.
Why Do We Make This Difference?
Well, the great difference is that, while in the first case you have one point in favor, asking for the loan to pay off the debt, in the second case, you may be declaring that you want to buy a car or maybe you are applying for a personal loan without having to give the destination of the money.
In one case, you are replacing several monthly payments for only one. In the other case, you are adding still one payment more. You know that it's not so, but the lender does not. This is where the credit repair comes in. You have to update the status of your report and establish a new history soon.
The first one, ask for small loans and for short terms, so you can have several entries in the report, all registering good compliance. When your rating has increased significantly, then you can ask for a greater amount.
Always use the same name, when applying for a credit. It may sound funny, but if your name is John Edmund Majors and at home they call you Jack or Jock, do not use them. So, always use your middle name too, so that will avoid mistaking you for someone called John Fitzpatrick Majors, who has not used his middle name either.
And Where Are The Good Prospects?
The good prospects lie in the fact that you are finally aware of what affects your credit both ways, good and bad, you are correcting the bad entries, both true and mistaken, you are learning how to influence the bureaus in a favorable way and even so, you are getting the loan you want.
Some Loans Do not Need …
Some loans do not require a security. These are unsecured loans and are granted against your signature alone. They are based on the most recent credit report and your stable job. On the other hand, if a security should be required, you can use property or a car to back the loan.
Depending On Your Needs
You will be able to use the car you're buying, to back your auto-loan or the property you are buying in the case of a mortgage or a home equity loan. Other, smaller amounts can use property as collateral, but it may not be worth while to put your home at risk just for a few bucks.