How can I get a loan to fix my credit?

Question

I am trying to get a loan (between $7,500-$10,000) to pay off some debt and clean my credit. I am looking for a LEGIT company and I have already tried Prosper but to my surprise, my credit score isnt high enough to be eligible. I did look at my credit score which is 531 (although Prosper said I was under 520) I made some mistakes in college by getting credit cards to pay for school. Is there any legit site, place or service that would provide me with a loan, with my credit with the option of a long-term payment plan? Please help

Answer 1

Getting another loan will not clean up your credit, if you are talking about paying off things in collection, or closed accounts they will only be marked as satisfied and still remain on your report for 7 years after the last transaction. If you have bad things from 5 years ago you have two years to go, if you pay them tomorrow you have 7 years from tomorrow. Do you have collateral worth the amount you want to borrow if not, especially in todays tightening of credit you unfortunately are out of luck

Answer 2

I advise against getting a loan to pay off other debts, especially if they are credit cards. Many people do just that, they get a loan at a lower interest then what their cards were they pay the balances on their cards and now have only the loan.

Unless you are 100% disciplined and throw away your cards afterwords you will end up in the same position, except now you have the extra loan to pay off as well.

As far as getting a loan in the first place, lenders have been getting a lot stricter nowadays, even for people with decent credit, so it may be tough. A secured loan may be easier to obtain if you have something of value, however this is even more risky, because if you end up in the situation that I described above then you will lose you secured item, and still have to pay the money back.

Answer 3

Well, since your credit score is LOW anyway - why bother getting more in debt just to be able to borrow more money? Look at your report and mentally write off anything over five years old - that'll be going away in a couple of years. Get a dispute form and then dispute any questionable stuff that is on there - that can't hurt and might even help if the stuff you dispute goes away. Why bother with a loan? If your credit is 530 you don't want to be borrowing with high interest anyway - so just forget about what you owe for now and when you want something save your cash and buy it. I just don't think it's such a great idea - (unless you are buying a house of course - who has $130,000 sitting around) to pay someone else to use your own money. Eventually most of the bad stuff will drop off and if you can get in on a few of those "six months same as cash" deals for a washer and dryer or laptop that you were going to pay cash for anyway, and maybe even pay off your car loan if you have one then you credit score will go up. I wouldn't lose sleep over it, though. I'd much rather have money in a savings account or CD than have banks willing to lend it to me at 18 percent.
Truly wealthy people don't pay interest - they draw it!