When you are shopping for low credit score personal loans, you probably will not have an abundance of options. And you should expect to compromise, like paying high-interest rates or even offering collateral. But there are a few strategies that you can try to get a personal loan with bad credit. Get multiple personalized offers at the same time so you can compare personalized rates, all without affecting your credit. Take these tips from Crawfort micro—loans and improve your chances of getting your loan approved.
Start Rebuilding Your Credit
If you have a credit score of 550, you are only 30 points from a fair credit score. It may be worth taking a little time to improve your credit. It will always be below average, and you will likely pay higher interest rates. But your chances of getting approved will also be much higher, and you will have access to a much more comprehensive range of lenders.
If you want to restore credit, start today. You will want to understand how your credit score is calculated. A secured credit card is an accessible form of credit that you can use to increase your credit score. Check your credit reports for errors that could affect your score. And make sure you make every payment on time.
Get Ratings from Bad Credit Lenders
If you are anxious to improve your credit, you can try to go to lenders who offer to finance for bad credit. For these personal loans, a credit score of 550 or less does not constitute an obstacle to eligibility. You can make a pre-approval request to determine if you qualify without having to complete an application or undergo a thorough credit check.
Customers with a FICO score below 600 always have a chance of obtaining a personal loan depending on the amount of the loan requested and the minimum income required.
Pay Attention to Personal Loan Requirements
Take a look at the different borrowing options to get an idea of the loans and credit lines for which you are eligible. It is good to ask different lenders what they expect from borrowers.
Here are some helpful questions to ask:
- Is there a minimum credit rating required to get a loan?
- Do I have to have a guaranteed income to be eligible for a loan?
- Can I apply for a loan with a co-signer if I don’t have a perfect credit report or enough income?
- What types of borrowers do you usually deal with?
Asking these questions can help you get an idea of what a lender is looking for and whether you would be the right candidate for a loan based on the answers they give you. It can also help you develop a game plan if you don’t meet all the requirements of a lender.
Check with your bank for these types of loans. Credit unions commonly offer loans secured by savings deposits or CDs to help their members recover their credit.
Ask The Lender To Reconsider
If you are applying for a personal loan and your request is rejected, you can always follow up with the lender and ask them to review your application.
First, you will want to make sure that you have good reasons why they should approve your loan application – despite your bad credit. What other financial factors show that you are a safe bet? What additional information can you provide to prove that you are a responsible borrower?
Maybe you have a high income, and you could easily afford the instant cash loans, or you have a good explanation for past delinquency. If your credit history is weak, you could provide proof of positive payment history for other bills, such as your rent.
It’s a bit risky, but it’s worth a try. The chances of success will be all the greater when you can demonstrate your financial stability and security. It might also be worth trying a credit union, which could be more flexible in its pricing.