How To Get a Loan With Bad Credit (Top 10 To-Do's)
When it comes to taking out a loan with bad credit some things will help you get started.
Gather up all your personal information before you start hunting for loans.
Having all the information put together in one place will allow you to answer questions that come your way a lot smoother than if you don't have your documents, such as proof of income, ready.
Know what your actual credit score is.
You may know it's not great because of your history, but an excellent way to start with your loan is knowing your credit score. There are a lot of great sites online that allow you access to your credit score, including the top three credit agencies: Equifax, Experian, and TransUnion.
Look through your credit report.
You can receive a free copy of your credit report annually from any of the top three American agencies. Look through your report in detail and make sure that there aren't any errors. Correcting these errors can bump your credit score rating up.
Research the best loans that are available to you.
Once you know your credit score, you can look into the different loan options that you have. You can determine if you qualify for secured personal loans, unsecured personal loans, secured installment type loans, and more. Doing this type of research can help open up your eyes to the kinds of loans available to you and help you make the right decision.
Reach out to your credit union or bank.
If you have a good history with them, they may be willing to work with you.
Know what to avoid.
There are some types of loans that make it almost impossible to pay off. Avoid scams that are not legitimate loans by getting references and doing your research. Avoid payday loans if you absolutely can.
Find a co-signer for your loan.
Asking someone to cosign a loan with you who has good credit can give you loan options that you might not have otherwise.
Prove to your lender that you can pay the loan back.
Come in with a plan showing how you are going to be able to cover that loan. Not only is this good for your lender to see, but it is excellent for you too. Being able to see how much of debt you can afford and understand how you plan to pay it back in installments will help you a ton.
Look into peer-to-peer lending.
. If the traditional loan lenders won't give you the time of day, perhaps there is a peer who would be able to offer you some money to help you reach your goal. Having all your facts straight and going to them with a plan that shows how you plan to pay them back can be helpful when approaching them.
Give it time.
Sometimes you need an emergency loan to get above an unexpected expense, but if that isn't the case give yourself some time to improve your credit score. Start paying your bills and loan payments on time. Pay down excessive debt that has you maxed out, so it is in a healthier debt range. These simple changes can improve your credit score and give you better loan options.
There are still some great options out there to get loans when you have bad credit.