Is it possible to get a personal loan with bad credit?
When you take the process of obtaining a personal loan, the question of your creditworthiness is often decisive in the response from the lending organization to which you apply. Indeed, for banks and other conventional credit institutions, ensuring that you will keep your commitments at the time of repayment is essential. As part of this, most lenders do what is called a credit check to assess, based on your borrowing history, the potential risk associated with lending you money. In such a context, a negative history linked to your past credits constitutes a major handicap. Indeed, very few banks are willing to lend to an individual with bad credit. In this kind of situation,
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Each time you obtain a loan from a bank or a lending institution, the information related to the operation and its progress is kept and summarized by the credit bureaus. In Canada, the two main ones are TransUnion and Equifax, whose mission is to collect, update and make available to lending organizations, all information related to your personal finances. When you apply for a new loan, your potential lender can then obtain from these credit bureaus all the information necessary to assess your creditworthiness by assigning you a credit score.
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The latter takes into account the type of loans to which you have taken out (past or current) and assigns to each of these, a rating in relation to meeting or not meeting your deadlines. If your repayments are still made on time, you will be highly rated. Conversely, if, for example, your account was canceled due to a non-refund (partial or full), you will have a low rating and therefore have bad credit. This will make you a risky borrower in the eyes of the lending institution to which you apply. Your ability to obtain a loan will be affected.
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