How to Get a Loan with a Bad Credit Score
Getting a loan with a very bad credit score is quite hard. You might need to pay top interest rates or provide collateral like the title to a bike that has been paid off. On the other hand, you might get approval for loans for small sums such as couple of hundred dollars. However, you can qualify for huge amounts if your qualifications and collateral meet the requirements. Maintaining a steady and stable income is also vital if you want to seek a loan with really bad credit history. Remember there are a number of ways to get a loan with a bad credit score.
Instructions
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1
Getting started
First of all, get a copy of your credit score to find out how bad your credit is. You can get this report free of cost from Annual Credit Report. This site provides free credit scores under the Fair Credit Reporting Act and is authorised by the Federal Trade Commission. You need to follow the guidelines listed in the credit report to get your credit score for a fee. Be aware of the fact that credit scores are available between 300 and 850. Scores close to 850 are better and close to 350 are really bad. -
2
Increase your credit rating
Improve your credit as much as you can by making payments to all your open current accounts. If you can, work on the negative entries on your report like old credit card accounts that were distributed to debt collectors. Try to make full payments on the current accounts, provided you have the money. However, after all this your credit report will continue showing very bad history, but the credit score might improve a little to help you get a loan. You should seek the loan around 2 months of completing the payments of your debt. This is important because it takes time to get the credit score updated. -
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Further instructions
Make sure you apply at a bank or credit union where you have an account. The relationship might assist you get extra consideration for a loan. Make sure you apply for an unsecured loan as it does not need collateral. If your request is rejected, then seek a secured loan which requires collateral. Know that secured installment loans are normally easy to get as you need to deposit cash that is taken as collateral in a savings account.
