When someone talks of “bad credit,” he or she means your positioning in terms of FICO scores. According to this rating model, a borrower is described in terms of his score so as to determine the suitability to lend him or her. The score of 579 is considered lower hence a bad credit score. If your credit score is above average, you can look for lenders who offer personal loans for better lending terms. In other words, people with good credit scores have more options and higher chances of qualifying for favorable terms from a majority of lenders.
Can Someone with Bad Credit Get Unsecured Personal Loans?
The process leading to qualification for a loan is sometimes cumbersome and demanding, especially if you have bad credit. In fact, people with bad credit are likely to get a personal loan except that they may get loans that attract higher interest rates, reduced repayment time and much stricter terms. Therefore, you may have to shop around for the best lender but this would require a lot of patience. Depending on the type of lender, you might want to apply online or fill out an application form in which case you will provide all the essential information about yourself, income, debt, address and more.
You may need to get quotes from a number of online lenders, compare their offers before picking the right deal. However, remember to shop from lenders who only perform “soft inquiry” of your report since “hard inquiry” has a negative effect on your credit history.
Get a Co-signer or a co-borrower if you think your credit score could impact your ability to borrow. If you are finding it difficult borrowing from a friend, you may still get a loan from a formal financial institution by getting someone with a good credit score to core-sign the loan. By getting the most qualified co-signer, your lender will set the lending terms based on the characteristics of your co-signer. Remember that co-signers are equally responsible for ensuring that your loan is repaid promptly. Prompt payments will certainly increase your score, making it easier to obtain loans in the future.
If your credit score is not as good, you may need to update your credit card to increase your chances of getting approved. Remember that credit cards have a sweeping effect on someone’s score, so you need to reduce your credit card debts to boost your score.