Personal loans are preferred because one can get the loan regardless of whether you are good or bad credit. However, there is a credit score limit below which you may not qualify for the loan. Similarly, the credit score does affect your rate of interest that the loan will attract. Well, your credit score does determine your interest in that if your credit score is high, you will be considered less risky and so you can negotiate for lower rates of interest.
However, if your credit score is low, you are considered more risky person and so you attract a high rate of interest. Online lenders take up the risk of lending you money regardless of your credit rating but they do compensate for this risk by charging a higher rate of interest. There are various errors that could occur which may affect your credit score negatively. You must therefore be watchful of these errors especially when you discover that your credit score is below what you expected.
One of the errors that could impact on your credit score is the identity error. This means tat details of someone with a similar name as yours could end up appearing on your report and so his or her credit status will affect yours too. Another error is that of poor reporting in the account. If your account details are reported incorrectly, then this could affect your credit score. In addition to this, there are the fraudulent errors that cause the worst problems. This is when someone uses your personal details to get a loan without your knowledge which means that it will appear as a default on your side. You must be ready to dispute these errors as soon as you realize them so as to avoid further problems to your credit score.