Last Updated on 2 years by AlexJames
If you are looking for fast credit, having a poor rating in the ranking of fast loans from financial institutions, also known as high-risk credit, is a substantial, and unfortunately common, barrier to obtaining a personal loan. But it is not necessarily an insurmountable obstacle.
Here are some tips to improve your chances of getting a personal loan despite a bad credit score:
Make sure your credit reports are accurate and up to date .
It’s human nature to want to avoid unpleasant activities, and checking your credit report online fast line by line when you have bad credit is as much fun as stepping on a scale after Thanksgiving dinner.
That said, it’s a very important step because your credit score can be even worse than it should be if you’re one of the 26% of people whose flash credit report contains incorrect information. Yes, that’s right. A Federal Trade Commission study found that one in four people have “at least one potentially significant error on at least one of their three credit reports.”
So even if you know your credit is bad, you need to make sure your score isn’t hurt by information that shouldn’t be there. Perhaps a long-standing debt still lingers on your report as unpaid or has passed its statute of limitations. Or, even worse, maybe some derogatory items that aren’t yours show up on your report due to some clerical error.
So ask yourself and go over your report with a fine tooth comb to make sure everything is accurate and up to date. If you find something that isn’t, ask for a correction right away.
Getting a quick loan with bad credit is hard enough, so it’s worth making sure that inaccurate reports don’t worsen your score.
Go to request a loan when you have fulfilled part of your previous obligations
If you can afford to pay one or two derogatory items, do so. Your past payment record determines 35 percent of your credit score, so improvements to your payment record can make a big dent.
If your credit took a hit due to a temporary job loss, serious illness, or some other mitigating factor, write a 100-word statement to add to your credit report. Although the declaration will not improve your credit score, some lenders do look at the “big picture” and take into account the circumstances surrounding the borrowers as part of their underwriting process. At the very least, borrowers will see that you take their credit profile seriously, which can only work in your favor.
Consider Socially Responsible Online Lenders
One of the best improvements in the subprime market has been the recent emergence of online lenders driven by a mission of fast , socially responsible lending. Lenders look at more than just your credit score, and consider your entire financial picture when considering you for a quick loan.
Try a company that will buy fast credits
Credit unions perform the same primary functions as banks, but unlike banks, they are nonprofit organizations with a legally mandated mission to serve a specific community. Their special nonprofit status and mission generally allows them to be more flexible and understanding when it comes to making quick loans to people with less than optimal credit.
You must be eligible to join credit unions, but you will most likely qualify for membership in at least one, based on your residence, occupation, or family affiliation.
Collateral offer of fast online credits
You can improve your chances of being approved for a fast online personal loan by applying for a loan secured by collateral, such as your car. However, proceed with this option with the utmost caution. If you fall behind on your payments, you risk losing your collateral. This means that you must be absolutely sure that you will be able to repay the loan in full before taking out a secured loan.
Get a reliable guarantor
Getting a creditworthy co-signer is one of the best ways to get a quick loan when your credit is bad. Family and close friends are likely candidates for co-signing your loan. Leaving a friend or family member on the hook for your bad debt can strain or even destroy your relationship with that person forever, so don’t take the matter lightly.
Try fast point-to-point loans
If your credit profile is less than perfect, but still not absolutely horrible, fast peer-to-peer loans may be a viable option. With quick point-to- point loans , you create an online profile that includes your financial circumstances along with background information and your reasons for applying for a loan.
If you have an attractive application, you can attract “sponsors” to finance your loan. Some may find it a bit awkward to offer their financial needs and circumstances to a peer-to-peer community of strangers; However, many people actually find it less stressful than borrowing from friends and family.
Use fast mortgage loans
Quick mortgage loans have declined in popularity since the Great Recession (and for good reason), but they still represent a financing option if your credit score doesn’t qualify you to borrow elsewhere. Quick home equity loans are generally not dependent on credit scores, and you keep your home while you pay off the loan. But if you default, you could end up losing your home to foreclosure, so be very careful. Be sure to borrow for something that is absolutely necessary and on terms you can afford.