According to Lending Tree, credit scores range anywhere between 300-850. A bad credit score is any that falls below 580. People with a bad credit score will have a harder time finding loans, and any loans that are found will be at a higher interest rates. However, people with a bad credit score can obtain a loan.
Credit Score
Learn your credit score. Several websites, including Annual Credit Report and Free Credit Report, offer credit score reports, usually for a small fee. Knowing your credit score can help you have a more accurate idea of any issues you are going to face. You can also see if there are any inaccuracies on your credit report that may be pulling your score down.
Contact the Lender Directly
According to Edmunds, a dealership or mortgage company will contact banks that may deny you, or will give you a loan at a higher interest rate. Rather than going through a car dealership or mortgage company, contact a bank that you already do business with or ask a friend or family member for a referral to a bank or lending institution that has fair rates and friendly service.
Friends and Family
Instead of obtaining a loan from a bank or other traditional outlets, consider going to a friend or family member who can supply the money. Set up a payment schedule with the other party, including interest. This person may also act a co-signer for a loan that is obtained through a bank or credit union. As a co-signer, the friend or relative takes on the responsibility of paying for the loan if you are no longer able to do so.
Fix Your Credit Score
One of the most effective ways to obtain a loan with bad credit is to attempt to improve your credit score. Pay off any smaller bills that are found on the report. Pay all of your existing bills on time and do not take out any more large amounts of debt, which adversely affects your credit. Pay down the balance of existing credit cards or consolidate the cards onto one lower interest credit card. The amount of times you apply for a loan also affects your credit so avoid applying with too many banks or other lending institutions.
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