Is It Possible to Get a Loan If You Have a Bad Credit History?


Bad credit can be a negative influence on the ability to get loans. When lenders see this credit, they cannot extend a borrower’s loan as they distrust their ability to pay. It can affect a person’s growth ability as personal loans are essential in facilitating life’s most significant expenses.

Having bad credit can also prevent a borrower from getting mortgage loans. As a result, one’s growth is affected. To avoid this, borrowers with bad credit can take a few more steps to qualify for a loan with a better rate.

What is a Bad Credit Score?

Credit scores vary between 300 to 850. There’s no agreed start of a bad credit score. However, a borrower with a score lower than 650 is considered high risk. As a result, they pay higher rates.

Moreover, different lenders have varying definitions of bad or good credits score. Some personal loan lenders will not lend to people with scores below 650. Apart from having a bad credit history, other factors affect this rating.

The amounts a borrower owes also contribute to this rating. If borrowers use more than 30% of their available consumer credit, it reduces their credit score. The length of the credit history, getting new credit cards, mixing credit, and not making the payments as required also influences this score.

Loans For Borrowers With A Bad Credit

Though having a bad credit history is detrimental, there are various things a borrower can do to get loans. Below are some loans they can apply for and how they can improve their credit rating.

Getting More Loans to Improve Rating

Getting facilities such as mortgage loans is challenging when a borrower has bad credit. However, the key to improving this bad rating is through more loans. If a bad-credit borrower qualifies for a loan, they should consider taking it.

They should ensure they can pay the loans they are given on time and as agreed without missing a repayment. As a result, they build a positive repayment history, which helps improve the current rating. It is crucial to use lenders that make on-time reporting of these repayments. Notably, payday loans do not report to the consumer credit bureaus. It is good to go for alternatives to help build the credit score.

Personal Loans

These are loans issued by banks, online loan companies, and credit unions and paid in installments. A borrower can get secured or unsecured loans. An unsecured loan will not need collateral, while a secured loan requires the borrower to provide collateral.

The collateral can be a property one owns or a vehicle. The borrower issues the certificate of deposit, and the lender can take the collateral if the loan is unrepaid.

A secured loan is easier to acquire, even with a bad credit history. They also have considerably better interest rates compared to unsecured loans.

Personal loans are ideal for people with bad credit. Their repayments range from 12 to 84 months, and the higher limits can provide financial relief to a borrower. Additionally, on-time repayments of such a loan help improve the bad rating.

Payday and Car Title Loans

Payday lenders are some of the online loan providers. They do not look at the credit rating to decide if a borrower qualifies for a loan. However, they provide short-term loans. If a borrower is pressed for money and they have bad credit, they can look to these providers for a loan.

Notably, these loans have high fees with an APR of close to 400%. Additionally, they do not report good payments to the consumer credit bureaus, which means they will not help improve the rating. For this reason, it’s only best to use them as a last resort.

Car title loans are also short-term loans that bad-credit borrowers can get. The borrower uses their car as collateral to get a loan. Such loans need to be repaid within 30 days and have higher interest rates. These loans are also risky if a borrower cannot repay, as they can lose their vehicle.


If a borrower has bad credit, they can still access loans. However, not all the options are good. For this reason, shopping around for loans with favorable repayment terms and interests is essential. Additionally, it is good to consider options such as personal loans that will report good repayments to the bureaus and improve the credit score.

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