Banks often tease people with personal loan rate bargains – with such deals like a three-percent interest rate loan. What you may not know is that these loans are only eligible to persons with a nearly perfect score.
Most people won’t get that kind of deal and are stuck with a higher interest rate on their loan.
However, LiveLend, a high-tech lender, has brought forth a new kind of loan that lets borrowers with less than perfect credit begin at a higher interest rate but can see their rate drop if their score improves.
It works by reviewing the person’s credit report every three months. If there has been a 25-point improvement, the borrower will see their interest rate drop two percentage points. Rates begin at 10 percent and go up to 37 percent, with no early payoff penalty.
A person can improve their credit score by making timely payments on their loan as well as addressing any issues with the credit report. For example, an old account appears to be open when it’s really closed.
Another way to improve a credit score is to put the borrower’s name on utility bills.
While LiveLend’s interest rate is high in the beginning, a person with a flawed credit report/score can still get a good deal and see their loan drop if they make improvements to their credit report. This is something all borrowers should strive for anyway.