Social Lending

Low Credit Rating and the Social Lending Jungle

Are you thinking about getting into social lending? Chances are good that you might have a project that needs funding, but what about that low credit rating? What about the realization that yore going to be paying a lot of interest? Don’t get discouraged, friends. When there’s a true desire to change your life, you will find that there is often a community that will help you make it happen!

First and foremost, don’t try to cover up your credit rating. It’s going to be out there for everyone to see anyway. If you have a bad credit score, chances are good that there’s a reason behind it. Just saying something about an illness or a bad relationship that went wrong can go a long way in explaining why you ended up in the financial mess in the first place. People will still try to help you out, but there will be some people that hold back. Does that mean that you should hold back too? Not at all.

Social lending is all about humans helping other humans. And guess what? Sometimes humans end up on bad luck. Sometimes times get really rough. The global recession hit a lot of people and slowed a lot of things down. If you really want to make sure that you have things in place, you want to ensure that you are getting the best listing together that you can.

Explain your story, own your story. It’s yours. People are clicking on your listing to hear from you. If there’s a discrepancy in the numbers or things don’t look right, don’t hide that either. Some people may want to fund your listing, but they’re worried that your margins are too small for the mistakes of life to not mess things up. You may want to explain if there’s a special case, such as that you live with your parents and don’t pay rent. That can be the difference between getting your loan funded and not being able to handle anything at all.

Get yourself into a position where you can really show people that you can handle the responsibility. Make sure that you have some time at a job where it looks like yore on stable ground. You’re selling yourself, your goals, and your mission all at the same time. And there’s no reason why you can’t pull it off. It just means that you’re going to have to work smart. It just means that you’re going to have to put time into your listing.

You may have to also sweeten the pot with a higher interest rate. Look at what the funded proposals were asking for when the credit risk was high, and add a few percentage points to that. Most likely, you’ll have someone lower the interest rate if they believe in your story anyway. It shows that you’re well aware that you’re a credit risk, and that you’re willing to ask accordingly.

Now is the time to work on that listing — are you ready?