How to Get a Loan With a Bad Credit Score

Some research found that 16% of Americans have a bad credit score.

Your credit rating is critical because it can determine if you can apply for a loan, get more credit, or even rent an apartment. 

However, having a low credit score doesn’t mean that you can’t do these things. While it might be a little more complicated, you can still get a quick loan with your credit. 

Check Your Credit Score

The first step is to check your credit score. You can check your score in multiple different places. For example, the law states that you can get a free copy of your credit report every year through Experian, TransUnion, or Equifax. 

This way, you can get a clear idea of your credit score and what’s hurting it. If you find any errors on the report, you can try and correct those and improve your score. 

If there are no errors and you have the time, you can try and improve your credit score. You could try paying down your debts ahead of time, limiting the number of credit inquiries, and taking out more debt while waiting for a loan.

Compare Lenders

If you can’t improve your credit score, you’ll want to compare lenders who offer loans to people with bad credit. Not all lenders have the exact requirements or borrowing ranges, so you should shop around. 

Each lender will have its cutoff credit score. So if your score doesn’t meet the mark for one lender, another lender may have a lower range. This is why it’s crucial to look up your credit report beforehand to know which lender is more likely to offer you a loan. 

Some lenders may not even take your credit score into account. They may look at your credit history and debt-to-income ratio and determine whether you could afford to pay back the loan. 

Different lenders can also offer different rates and money depending on what type of loan you’re taking out. For example, if you want an FHA mortgage loan with a down payment, you’ll need at least a score of 580 or better to get a reasonable rate. 

However, if you go to a bank or a credit union, they may require a score of 600 to give you a normal mortgage.

Talk With Your Bank

An excellent place to start is with your credit union or bank. They already know your financial profile, and if they’re aware of your habits, they may be willing to give you a loan.

Credit unions have more flexible lending standards than a bank does. They might be more willing to offer you a small personal loan. However, if you’ve been at your bank for years, ask the bank’s loan department how you can start the loan application process. 

However, this is only a research stage. You don’t want to start applying for loans yet because it could hurt your credit score even more if you’re not approved. You shouldn’t apply for a loan until you’re confident that’s the one you want and you think you can get accepted. 

Have a Cosigner

If you can’t find a loan that will lend to you, consider asking someone to cosign with you. This could help you get a lower rate. 

A cosigner will sign the loan saying that they will be held financially responsible if you don’t pay back the money. In some cases, the lender will take into account the cosigner’s credit and income information so that you’re more likely to be approved.

Prove You Can Pay the Money Back

In some cases, lenders will let you offer up collateral if you aren’t able to pay them back in cash. But you should also make sure that you choose a loan that can fit your budget. 

Lenders will look at this information, and if they don’t think that you have enough money to pay them back, they may not offer you the loan. 

You’ll have to submit proof of income and record all your debt. This way, you can prove that even if you do have bad credit, you still have good income and can pay the lender back. 

Look at Different Loan Options

There are many different loans that you can apply for, and some are better for people with bad credit than others. 

For example, you may be able to get a secured personal loan. These are typically taken out to get a mortgage or a car. When you borrow the money through this loan, you’re securing the amount you’re borrowing by putting up one of your assets as collateral. 

This way, they will take back the house or the car if you can’t pay the loan back. Some people want to avoid these loans because the lender will take the asset if they fail to make payments. However, it shows good faith for people who don’t have good credit. 

You may also be able to get an unsecured personal loan. These aren’t back with any assets, so it’s a greater risk for a lender. If you have bad credit, you’re less likely to be approved, but check with different lenders.

Learn More About How to Get a Loan With a Bad Credit Score

These are only a few ways to get a loan with a bad credit score, but there are many other ways you can take out some money quickly. 

Thankfully, FastLoanDirect is here to help you get cash quickly. 

We will take your credit score in to account, but we offer a next-day deposit if you’re approved. Check us out to get some cash today!