Having bad credit means that your score range is anywhere from 300 to 629. It also means that you are less likely to be approved for a loan or get the best rate. However, that doesn’t mean that you’ve got no options. You can find loans for poor credit, but it is likely to take more research, and you may have to deal with a few rejections first.
No one wants bad credit, but it can happen for a variety of reasons, and you’re likely to find yourself in that situation. It doesn’t mean you’re a bad person, but it does mean that your track record (credit history) shows that you have a tendency not to repay your debt, even if you do end up paying it off later. Because it’s easier to get a loan and get a reasonable rate with good credit, it means bad credit has the opposite effect. Learning what to do to apply for a bad credit loan can help you get the money you need and build your credit score back up.
What’s Your Credit Score?
In a sense, your credit score tells lenders what debts you currently have, how much money you have in debt, and more. This tells them how creditworthy you are. If you have a low score, such as a 600, it means that you’ve probably got a lot of credit cards that have high balances. It may also indicate that you’ve got debts that were sent to collections.
It’s best to always request your credit score from the three major credit bureaus when possible because it doesn’t hurt your credit history or score. It gives you a better idea of what lenders see when they pull your report.
You can also request your credit report free once per calendar year from the three major credit bureaus, or utilize one of the many companies like Credit Karma providing free credit reports. This contains all the information, such as which credit cards you have open, how much is on them, what their limits are, and what other debt you may have.
Types of Loans for Poor Credit
If you know you have bad credit, it’s time to focus on ways to get a personal loan guaranteed approval. Loans for poor credit are misunderstood. Most people think their only option is to get a payday loan. While this option is available, it’s not the only one, and many people worry about payday loans because they are short-term (usually two weeks).
It can be tough to qualify for a personal loan through a credit union or banking institution with a credit score lower than 500, but it is possible. You can expect to pay a higher interest rate and may have a shorter loan term. Terms can be anywhere from 36 to 60 months.
If you’re serious about getting a loan, you may want to talk to your banking institution. Ask them specific questions, such as the lowest possible credit score you can have to qualify and the highest interest rate you could be required to pay. These questions give you an idea of whether or not you will be approved.
The lender is going to check your credit history. Online payday loan companies often don’t check your history and only require you to make enough money through your job. The credit check is considered a hard inquiry, so it can lower your score slightly. However, you can request a couple of loans through different lenders, and they should all fall under the same hard inquiry. Therefore, you can choose a couple of lending institutions that you trust and see about loans for poor credit without hurting your credit score too much. Here are some other articles you may find helpful:
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