A bad credit score doesn’t have to stand in your way of getting a personal loan to cover an emergency or consolidate debts. There are lenders who offer bad credit loans, although the terms, interest rates and fees can vary.
Borrowers with poor credit (a FICO score of 629 or lower) might need to put in a little more effort to qualify for a bad credit loan, but doing so may help you get accepted and may result in a lower interest rate.
How to get a Personal Loan with Bad Credit
1. Compare lenders
It’s important to compare multiple lenders when shopping for a bad credit loan.
Each lender has different borrower requirements and rates, so it’s important to find one that’s affordable and offers the features that work for you.
My USA Finance offers features like fast funding and credit-building tools so that borrowers can manage their finances easily.
2. Check your credit
Before applying for any type of loan, it’s important to check your credit score and credit report. Lenders typically have a minimum credit score requirement, and you could be rejected if you don’t meet it.
3. Prequalify
Pre-qualifying is a great way to find out what rate you can get on a loan before you apply. It doesn’t affect your score, and might help with comparing offers from different lenders. Most online lenders offer this feature and some banks too!
4. Add a co-signer
If you have a family member or friend with good credit, they may be willing to co-sign your loan application.
A co-signer is entirely responsible for paying back a loan and the other borrower.
5. Gather all financial documents
You must have the necessary financial documents to apply for a bad credit personal loan. Gather the following financial documents and information:
Personal contact information – social security number, full name, and address
Driver’s license – or another form of personal identification
Personal loan information – why you need the loan
Tax information – W-2 forms and federal tax return for the last two years
Bank statements – two most recent bank statements for all bank accounts
Utility bills or mortgage statement – to verify your address
How to Improve a Bad Credit Score
1. Pay your bills on time
2. Pay down your debts
High levels of debt can also negatively impact your credit score. Try to pay down your debts as much as possible.
3. Keep your credit utilization low
4. Check your credit report for errors
It’s important to check your credit report for errors regularly. If you find any errors, dispute them with the credit bureaus to have them corrected.
5. Use credit responsibly
It is important to use credit responsibly over time by only applying for loans and credit cards that you need and making payments on time and keeping balances low.
With these tips, you can work toward improving your credit score and getting a better loan.
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If you have bad credit, need a loan, or want to start working on your financial wellness, My USA Finance has the right tools to help you build, grow, and maintain your finances.
