According to the latest research, 16% of Americans have bad credit. If you also fall into that category, you may be blacklisted from getting a loan.
But what does that mean? Can you never get approved for a personal loan?
If you need a quick loan, don’t worry. There are still ways to get one, even if you think you’re blacklisted. Keep reading to discover how to get a loan with bad credit history.
The good news is that the backlist doesn’t actually exist. It started as a rumor that many people made up when they were struggling to get approved for a loan. It may have also been used to try and scare people into paying off all of their debts.
However, having bad credit could basically mean that you’re backlisted, even if there is no official list. But that is only due to the fact that it’s hard to get approved for a loan when you have bad credit.
Instead of worrying about a blacklist, figure out what your credit score is and where you stand. You can request a free personal credit report once every year from three places in the United States.
After you check your credit report, you’ll need to determine if there’s any way that you can improve your credit score and lower your risk profile. Settling any debt doesn’t mean your credit score will automatically go up because the repayment history of debt will stay on your record for at least two years.
But, you can start by checking to see if there are any errors in the report. Are they any charges that were made that you didn’t make? Did someone take out a loan or a credit card in your name?
If there are any errors, getting those corrected could improve your credit score, depending on how bad they were. If there are no errors, start with paying off your credit card balance.
Paying back your balance can impact your score because the banks will see that you’re capable of paying off your loans. You’ll also want to pay your bills on time. You should always pay the statement balance rather than the minimum.
If improving your credit score isn’t an option and you need cash now, you’ll need to start looking for loans for people with bad credit. These loans are for people who think they’re “blacklisted,” and could improve your chances of getting approved.
However, keep in mind that when a lender offers these loans, they normally charge a higher rate of interest as well. They’re taking on a bigger risk with the people that they’re going to lend to. Instead of considering your credit score, they’ll look at your income and how likely you might be to actually pay the loan back.
When you’re looking for a loan with bad credit, consider a few tips. For example, if you’re going to take out this loan, try and pay it back as quickly as possible. If you don’t, fees and interest may surge, and you’ll be in even more debt than when you started.
You should also figure out which loan you want to apply for. Don’t apply for multiple loans at once because a hard credit inquiry can damage your credit score even more.
If you want to check out multiple loans at once, consider getting pre-approved, which only means that you have a soft credit check. This won’t impact your credit score.
There are many different types of loans that you are more likely to get approved for if you have a low credit score. For example, peer-to-peer lending is gaining momentum, and it’s becoming more and more popular.
You can get a loan from a private person rather than a bank by going on a P2P platform. You don’t need to go through a bank or get a credit check. There are also normally not any special financial minimums that you need to meet.
If you don’t repay the principal and the interest in the amount of time you agreed to, it could damage your credit and further prevent you from getting loans in the future.
Personal secured loans are loans that you need to offer collateral instead of money. If you don’t pay back the loan, then the bank or lender can take your home, car, or whatever else you put up as collateral.
This gives the bank a safe way to deal with an applicant who doesn’t have a good credit history.
These loans are designed for people who have a lower income and possibly bad credit. These loans come from the bank, so they will do a credit check.
If your credit history isn’t the best, you could get rejected, but you have more of a chance of getting approved for this type of loan.
You can also use a cosigner on this loan to improve your chances. When there is a cosigner, the lender will consider their credit history as well.
These are only a few ways to get a loan if you think you’re blacklisted, but there are many other things that you can try.
We know that getting a loan with a bad credit score can seem impossible, but we’re here to help you out.
At FastLoanDirect, we can connect you with the right lender so that you can get funding the next day. Check out our website today!