How to Get Financing With a Low Credit Score

Your credit score comes from data on your credit reports. The Federal Reserve Bank of San Francisco explains that things like your loans, revolving credit accounts and the way you repay them factor into the score. You end up with a low number if you get too many accounts, use your entire credit lines or have problems repaying your balances. The bad score gets in the way of future credit applications, although there are ways to still get financing even with a checkered financial past.

Instructions

1

Order your TransUnion, Equifax and Experian credit reports before applying for financing. The Federal Trade Commission (FTC) explains that you get them free once every 12 months through annualcreditreport.com. The credit bureaus sell additional copies if you already used your free reports for the year.

2

Remove as many negative items from your credit reports as possible. Your low credit score goes up for every bad entry that gets erased. Review the entries for mistakes that give you reasons to file disputes. Divorcenet, a legal website, recommends disputing every error, no matter how small, because the negative information gets wiped out if the credit bureaus cannot confirm it within 30 days. All three bureaus have online dispute pages with secure forms to submit challenges.

3

Apply for financing with a bank, credit union or other financial institution with which you already do business, especially if you have a long-term relationship. Banks and credit unions are sometimes more forgiving of credit problems for their existing customers.

4

Apply for financing with lenders that specialize in subprime loans if you cannot get approved at your current financial institution. Subprime lenders overlook your problems in exchange for charging higher than average interest rates, according to the Lending Tree loan website. You can usually refinance the loan within a year or two if you make all payments promptly and handle any other accounts responsibly, too.