How to get a bad credit bureau loan

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Even with a low credit rating, a personal loan is possible. Read on to learn more about loans for bad credit. (Shutterstock)

A good credit score can really come in handy when you need to borrow money. If you have bad credit, it can be difficult to get a personal loan — especially one with low interest rates and no fees. But some lenders cater to borrowers with bad credit.

Here’s how to get a bad credit loan and what you need to know about this specific type of loan product.

If you need a personal loan, visit Credible View your pre-qualified rates from different lenders, all in one place.

1. Check your credit report and history

Before you apply for one bad credit loan, it’s a good idea to check both your credit report and credit history to see where you stand. Knowing your credit score can help you determine what types of loans you may qualify for, which lenders to apply to, and which ones to skip if you’re unlikely to meet their requirements.

Checking your credit report gives you an opportunity to identify possible errors or fraud and report them to the credit reporting agency. If certain items on your credit report are found to be inaccurate, the credit bureau may remove them from your report. This can usually improve your credit score with little effort on your part. You can also review your report to see areas you can improve in, so you can qualify for better credit products in the future.

The reason lenders like to see high credit scores is that a low credit score is usually due to negative grades on your credit report, e.g. B. on late payments or collection debts. A low credit score indicates to a lender that you are more likely to miss your debt payments or default on your loan, which can be very costly to the lender.

WHAT CREDIT DO YOU NEED FOR A PRIVATE LOAN?

2. Prequalify for a personal loan

When applying for a private loan, trigger a hard query on your credit report, temporarily lowering your credit score. This is unavoidable when looking to get a personal loan, but you can avoid having a hard credit request unnecessarily added to your report.

Before you officially apply for a personal loan, pre-qualify with the lender to get an estimated loan offer. If you pre-qualify, the lender only performs a gentle query of your credit report. So, if the lender tells you they are unlikely to approve your loan application, or presents you with terms that you know you do not want to accept, you can skip the official application process with that lender.

Believable makes it easy Compare personal loan rates from different lenders and it will not affect your credit score.

3. Compare bad credit loans

Before prequalifying, find out which lenders will accept your credit score so you don’t waste time and energy with lenders who don’t work with you.

Several lenders offer personal loans for borrowers with lower credit ratings. These lenders will often consider other information when reviewing your application, such as: B. Your employment and income. While most lenders typically require a score of at least 580, Some lenders don’t even require a credit check.

It’s important to compare prequalification offers from at least three to five different lenders. In this way you will find a loan that best suits your financial situation.

4. Find a co-signer

You don’t necessarily have to apply for a loan aimed at borrowers with poor credit ratings. A way to increase your chances of qualifying for a private loan — and getting a lower interest rate — is to apply to a co-signer who has a higher credit rating than you. This can be a trusted friend or family member.

However, the co-signer should be careful. You are responsible for making the loan payments if you are unable to do so. If both you and your co-signer fail to make payments or are late in making your payments, your creditworthiness may suffer.

HOW TO FIND A STUDENT LOAN CO-SIGNER

What should be considered when looking for a loan with a bad credit bureau?

Not sure if taking out a bad credit personal loan is the right move for you? Here are some factors worth considering:

  • Look for the best deal. Just because you have a bad credit score doesn’t mean you have to take the first personal loan offer that comes your way. Compare personal loan offers from different lenders to see which one has the lowest interest rates and fees, as well as a loan amount and repayment period that suits your needs.
  • Loans with bad credit come with higher fees. To offset their risk, lenders often charge higher fees when lending to consumers with poor credit ratings, such as B. Application or placement fees for processing the loan.
  • Interest rates are higher. Lenders also tend to charge much higher interest rates if you have bad credit. It may be worth waiting until your credit score improves before applying for a loan, since a higher interest rate will cost you a lot more money over the life of a loan.

When you’re ready to apply for a personal loan, go to Credible quickly and easily Compare personal loan rates to find one that best suits your needs.

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