Based on the FICO score range of 300 to 850, credit scores below 670 are considered either fair or bad. According to a consumer credit report, 34% of Americans fall into this category.
One thing people with credit scores below 670 often ask is, I desperately need a loan but I have bad credit, so how do I go about getting accepted for a loan?
There are solutions out there for how to qualify for a loan even if you do have bad credit, you just have to know the right steps to take.
Here are some tips to help you get a loan with bad credit.
Improve Your Credit Health Before Applying
Credit scores are a reflection of your behavior when it comes to borrowing and paying back money.
The higher your credit score, the better. People with high credit scores tend to receive lower interest rates when borrowing money, as opposed to those with low credit scores. If you’d like low-interest rates when borrowing money or want to avoid getting denied a loan, take a look at these factors that can impact your score:
- Payment History
- Credit usage
- Length of credit history
If you need help when it comes to how to fix your bad credit or if you have questions regarding financial issues, head over to bonsaifinance.com for free advice.
Shop Around to Compare Options
Once you’ve worked on improving your credit as much as you can, it’s time to actually apply for the loan.
The interest rates and terms you’re given when applying for a loan can vary from lender to lender after they take a look at your credit history. Because of this, you want to shop around with multiple lenders and compare your options.
While you can still head over to different banks and credit unions in your area to see what they have to offer, you can also just check out different loan options available to you right online.
Credit unions have been known to look beyond poor credit history if they feel you’ll be able to pay off the loan, so a credit union may be your best bet.
Get a Co-Signer
Having someone willing to co-sign your loan can increase your chances of getting accepted for one.
With a co-signer, the lender will determine the terms of the loan you’re looking for based on the credit score of the co-signer. This is particularly helpful because if you have bad credit, but they have great credit, it’s likely your loan won’t be denied.
However, when someone co-signs for your loan, they also become responsible for the repayment. Due to this, all payment information regarding the loan will be recorded on both your credit report and theirs. So, if you’re late with payments or are compromising your loan, both you are your co-signer will be at fault.
I Desperately Need a Loan but I Have Bad Credit
Many people often ask themselves, I desperately need a loan, but I have bad credit; what can I do?
Though it may not seem like it, it is possible to get a loan even if you have poor credit; you just have to take the right steps.
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