How to Get Loans Despite Your Bad Credit History
Securing a loan can be tough when you do not have a good credit history. Banks are more choosey about whom they lend. But you will find online lenders who may be willing to offer you monetary assistance despite credit issues. Ahead of accepting a loan application there are several factors that a lender considers and your credit file is the most important of all. So, it is important that you have a good credit score to qualify.
But what if you have a bad credit history? Do not worry! It is still possible to get loans despite low credit score. To know what exactly your credit score is you can first of all request for your credit file from all major credit bureaus. When searching for loans with bad credit history you are likely to find very less options available. Even if you find a favorable solution you will may be charged with high interest rates or asked to pledge security in order to moderate the risk involved.
However, there are a few strategies that can be followed get a loan with poor credit.
Start Rebuilding Your Credit
You can start with by rebuilding your credit score. When applying for a loan, lender may still charge you high interest rates. But you can take your first step towards mending your credit ranking by making timely repayment. Rebuilding credit will increase your approval chances and will give you access to a wider range of lenders. Check your credit report regularly to check if there is an error that could be affecting your score.
Collect Quotes From Different Lenders
Improving credit status will take time. If you cannot wait any longer, try reaching out to lenders who specialize in offering loans to bad credit holders. For such lenders, low credit rating is never considered as an obstacle. You can go through the various pre-approval loan deals to check if you can qualify without undergoing credit checks or fill out an application.
Opt For A Co-Signer
If you are unable to rely on your credit status to get a loan, you can get help from someone else who has a good credit score to co-sign the deal. A co-signer is a third party who agrees to repay back the loan if you fail to pay off. You can search for lenders who accept co-signers. You can ask your friend or a family member who has a good credit to sign as a co-applicant. The positive history of the co-signer will help make up for your bad credit score and increase your approval chances.
Choose A Secured Loan
Getting approval for a loan against an asset can be easier for a bad credit holder compared to approval for an unsecured loan. Home equity loans, mortgage loans, car loan and secured personal loans are some of the loans that can only be obtained by pledging collateral. Check for lenders who offer these types of loans and choose the deal that will offer you the cash you need as well as help you rebuild credit with time.
Request The Lender To Reconsider
If a lender has rejected your loan request, you can always request for follow-up and request to reconsider your loan request. Before requesting you need to make sure you have good reasons based on which a lender should reconsider your loan request despite having less than perfect credit status. You should also provide information that will prove you are a responsible borrower.
Keep A Watch On Predatory Lending
Just because you are in need of urgent cash does not mean that you should sign up for the very first lender who agrees to approve you loan despite credit problem. It is recommended never to sign up for a predatory loan such as cash advance loan, payday loans, or car title loans. These loans are some of the most expensive ways to borrow. Getting stuck with cost that you are unable to repay back will deteriorate your financial situation and worsen your credit rating. Therefore, watch out for such predatory lenders. This makes it important to do proper research, take time ahead of taking a decision, and never borrow what you cannot afford to repay.