If you have a low credit score, you’re not alone. According to Experian, approximately 16 percent of Americans have a low FICO score of between 300 and 579 points.
Even if you don’t have good or perfect credit, that doesn’t mean that you can’t get a personal loan if you need one.
Check out this list of ways that you can get approved for a personal loan, regardless of your score or what’s on your credit report.
First off, you need to know whether or not your credit score is good. Lenders will check your credit report when you apply for a quick loan to determine whether you’re a trustworthy borrower.
So, how do you know if you have a low credit score? Check your report online to determine what your current FICO score is. The credit report will show your past and current credit behavior which helps to determine your total score.
Most people with bad or low credit have had difficulty making payments in the past, or they may have skipped or missed payments altogether. Other reasons for low credit include if you’ve ever had a judgment filed against you or if you’ve ever filed for bankruptcy.
Consumers with a negative payment history will tend to have lower credit scores. If this applies to you, it’s still possible to get approval for a personal loan.
If you’ve checked your credit report and confirmed that your score is low, it’s still possible to be approved for a personal loan. However, there are some important things to remember before you fill out an application.
First, those with a low credit score may not be able to borrow as much as those with a higher score. So, if you have a set amount of money you need, be prepared to be able to borrow a bit less than you may have anticipated.
Another downside to getting a quick loan with low credit is that you’ll pay higher interest rates. You may also be stuck paying higher fees, too.
The higher your interest rate is, the longer the loan will take to pay off. You’ll also be paying more money toward the interest rather than toward the principal balance of the loan.
If you need a loan now, you can still get approved. Just be prepared to pay more and to take longer to pay it off. Paying more than the monthly minimum will help you pay it off faster.
You can also go ahead and pull a “soft credit inquiry” rather than a “hard” one. This type of credit inquiry only looks at your basic credit history and doesn’t pull your FICO or your full credit report. Use this information to give you a better idea of which lenders will approve you for a loan.
If you need a quick loan now and your credit score is low, it may actually help you raise it in the future. Once you’re approved, begin making payments on time each and every month.
Pay more than your required minimum and you’ll watch your balance dwindle faster. The more you pay each month, the happier your lender will be.
As time goes on, making timely and full payments can actually help to raise your credit score. It shows the lender that you are a responsible borrower and that you can be trusted to repay the debt you owe. In the future, it might even be easier to get approved thanks to your new track record.
Keep in mind that if you fail to repay your loan on time or miss a payment, your score could take a dive. Be diligent about paying off your loan and if you can, sign up for automatic payments so you never miss one.
There are a good number of lenders that may be willing to give you a loan with low credit. But improving your score before you apply is the best way to get more money at a lower interest rate.
If you work toward building up and improving your credit score before you apply, you’ll reap more benefits. Remember, borrowers with a decent score tend to be able to borrow more and for a lower rate.
Thankfully, there are some things you can do to raise your credit score before applying for a quick loan. First, keep an eye on your credit report and alert the credit bureaus if you notice something is incorrect so they can make corrections.
Pay all of your other debts on time, and try to pay off as much as you can including credit cards. Paying back your debts on time or even in full each month is the first step toward repairing your score.
Don’t use your existing credit limit if you don’t have to. Remember, the purpose of getting a loan is to be able to borrow money at a lower rate than you are getting with your credit cards.
Don’t be discouraged if you have a low credit score. Start working to get your score higher, or take out a personal loan now so you can improve your score for future borrowing needs.
If you’re looking for fast loans online, be sure to visit our website and learn more about our lending process so you can get money fast today.