For many people, a bad credit score is something that looms over their heads like a raincloud – only, instead of pouring rain over them, its role is to get in the way of every loan application, mortgage agreement, or large financial decision they make throughout their lives.
For those with a bad credit score, getting approved for any type of loan was once a monumental task but, thanks to recent advancements in technology, the process has become a lot easier.
What was once a confusing and long-winded process has been made much simpler for anyone trying to access funds with a poor credit score.
In this article, we’ll be discussing just how much of an impact technology has had on the finance industry, and how the bad credit loan industry has particularly benefitted.
The importance of technology in the finance industry
Technology has played a vital role in the growth of the finance industry for decades now; being a primary reason why innovative financial products and services have been offered en masse to customers across the globe.
To start with, the obvious way that technology has improved the finance industry is through accessible online and mobile banking options. Compared to just a few decades ago when all banking was done in person, this new technology has revolutionized the banking industry and how people interact with it.
As of 2022, 78% of adults prefer to bank online or on their mobile, giving consumers more control over their finances and easier access to their cash.
Going further, new technology has also spurred on the growth of Blockchain and cryptocurrencies; an especially important piece of technology that is changing the very underpinning of the financial industry.
Based on a decentralized system, blockchain has been making a serious case for making finance a much more transparent, accessible, and trustworthy environment for everyone that interacts with it.
You may have heard people making millions from crypto investments, or some online retailers accepting crypto as a form of payment, but the uses of this technology stretch even further than many realize.
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How the bad credit loans industry is changing
It’s clear that technology has changed – and is still changing – the financial industry at an extremely rapid pace. But, what does all this mean for the bad credit loan industry?
Applications made simple
Applying for loans can be a big hassle, especially when you know the chances of being approved are slim due to your bad credit score. But, with the help of automation technology, the application process has been streamlined significantly.
What was once a process that relied on humans doing a lot of manual filing, paperwork, and checking, has now been almost completely automated. Now, machines do all of the arduous work that goes into deciding whether someone can receive a bad credit loan.
A lot of providers of bad credit loans also now offer pre-qualification tools where borrowers can check whether they’re eligible to apply or not beforehand without having any further impact on their credit score.
Faster approval processes
In the past, borrowers would have to deal with a long wait before receiving their loan – sometimes up to a few weeks. Now that the process of applying for a loan is quicker, so is the route to getting the money in your bank account.
Because much of this process is now automated, you don’t have to wait for a human to go over your application and decide whether you deserve the money you requested or not. Instead, a computer will automatically approve you based on already agreed algorithms so nothing is left to chance.
After you’ve been approved for your loan, which you should get minutes after you’ve completed your application, you can expect to receive the funds in your bank account in as little as one business day.
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Personalized loan options
When you have a bad credit score, you may wrongly think that you’re going to be left with the bottom-of-the-barrel loan options that are too bad to offer anyone else with a better score.
Although the rates you are offered may not be the most ideal, it doesn’t mean you’re going to be left in an awkward position thanks to the latest technology.
New technology and the emergence of big data give financial platforms a lot of information about a borrower’s financial situation and personal preferences. They used this information to create personalised loan options that are far superior to the one-size-fits-all loans of previous decades.
Now, there is a much larger range of loans available for people with bad credit scores, from payday loans to unsecured loans that can act as starter accounts to help borrowers fix a bad credit score.
Transparency avoids confusion
As we’ve mentioned, blockchain has become a big deal in the world of technology, single-handedly revolutionizing some of our most important industries – including the financial industry.
One of the most important parts of the blockchain platform is the drive toward increased transparency, which has proven to be especially important in the world of bad credit loans.
A lot of people aren’t as financially literate as they would like, so rely on financial institutions to provide them with clear and understandable information on their finances – which isn’t always offered by some banks and lending providers.
However, newer platforms that offer bad credit loans present terms and fees in a much more transparent manner, allowing borrowers to review all the details before accepting a loan.
The more transparent information that’s offered, the more control borrowers have over their money and financial commitments.
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Leverage the power of technology when applying for a bad credit loan
Applying for a bad credit loan has often felt like a minefield; although you need access to funds quickly, no one wants to further jeopardise their credit score in the process.
However, with the latest technology entering the market, the financial industry is becoming much more efficient, transparent, and personalized.
With these improvements, financial institutions have been able to offer better, more tailored, bad credit loans to borrowers, helping them get their first step on the ladder to a better credit score.
As new technology continues to be introduced, this field is expected to continue improving, making it easier for anyone to get access to the cash they need.
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