How to Fix Credit Problems With Personal Loans

Fixing your credit and raising your score requires developing better credit habits. Although it's not easy to obtain personal loans with credit problems, acquiring a loan and paying off the balance will increase your credit score and put you on the path towards good credit. If looking for a way to improve your credit, consider applying for a small loan with your bank or credit union.

Instructions

1

Use a co-signer. You probably will not be able to obtain a personal loan on your own. Ask a family member -- such as spouse or parent -- to co-sign your personal loan.

2

Secure your personal loan with collateral. Use a personal piece of property such as a vehicle title as collateral for your loan. If unable to repay your loan, the lender can take possession of your property.

3

Borrow a small amount of money. Opt for a small personal loan, which is easier to pay off.

4

Compare loan rates. Request loan quotes from at least two lenders to compare personal loan rates.

5

Complete an application and close on your loan. Submit an application for a personal loan and wait for an approval notification. Once approved, schedule a date to close on your loan and receive funds.

6

Make timely payments. Mail monthly payments several days before the due date to avoid a late payment and fix your credit score. Timely payments add points to your credit score.

7

Pay off the personal loan. Satisfying or paying off debt improves your credit rating. Aim to pay off the personal loan within a few months to fix your credit.