Securing a personal loan isn’t that easy—especially with a poor credit score. Most lenders don’t like extending loans to people with bad credit ratings. You will first be subjected to a thorough credit check. However, you can still secure a personal loan with a bad credit score. All you need is the following tips and tricks. So, don’t let a bad credit score limit you when it comes to securing a personal loan. 

Start By Knowing Your Credit Rating

The first step involves knowing your credit score. It’s important to note that most lenders will approve your loan application based on your credit score. With a bad credit score, your loan application might not be approved. And if it’s approved, you will be subjected to a higher interest rate. So, knowing your credit score is of paramount importance. Plus, if you don’t have a credit history, most lenders will be reluctant to consider your loan application. This is because they will lack a basis to assess your creditworthiness or risk. So, start by understanding what a credit score is. Build a strong credit history. Hire a debt advisor to take you through the process.

Here is a breakdown of credit score: A credit score of below 669 is considered fair or poor. A credit score of more than 700 is considered good or excellent. So, be sure to consult with your credit bureau before making a loan application.

Approach Lenders Directly

The next step is to approach a bank or lender directly. This is especially important if your credit score is bad. Approaching lenders directly helps you table your case. For instance, if you have a consistent income and your credit score is poor, approaching a lender directly might help you secure a loan. Among other things, your employer will assess your creditworthiness based on your income.

It’s also important to note that lenders, nowadays, use alternative data to assess your ability to pay back. For instance, they may use personal data—which is normally not included in the report—to establish your creditworthiness. This data gives them a more holistic understanding as far as your financial profile is concerned.

Thus, directly approaching your lender gives you an advantage. This is because your alternative data will be considered when assessing your ability to pay back the loan. Furthermore, your lender might consider things like income, employment history, debt-to-income ratio, etc.

To establish whether your lender uses alternative data, check the advertisement. See whether they have that provision for that. Also, you can go to that lender’s website.

Be Prepared

Another important step towards securing a loan is preparedness. Remember, you will be required to prove your creditworthiness. So, have all the details ready. From the credit report to income statement—being prepared will make the process smooth. So, have the following documents ready:

•   A two-year tax return record
•  Your employment history
•  Proof of paycheck
•  Your past borrowing history. This includes home mortgages, car loans, student loans, etc.
•  Credit card debt documentation
•  All relevant bank statements
•  Your past education records

Be Transparent

Don’t hide any information from your lender. If you are discovered, your loan application will be canceled. So, bring all the documents. Be transparent as far as your income is concerned. Don’t overstate your income. Don’t hide your debt.

Try Getting a Loan with No Credit Check

Have a flimsy credit history and you need urgent cash? Well, don’t freak. There are lots of options. From online lenders to banks, you won’t miss an option that suits your explicit needs. Here are the options you can pursue:

Online Lenders

With online lenders, you have several options to choose from as far as getting a credit facility is concerned. Online lenders will assess the credit features appearing on your report before approving your loan. So, do your research. Choose a lender that fits into your explicit needs.

Credit Unions

You can also take your game to credit unions. This applies to those borrowers who are members of popular credit unions. Like online lenders, credit unions are many. So, it’s upon you to make a wise decision. Most credit unions offer loans without a credit check. With credit unions, you have lenders who can offer you loans with favorable terms and conditions.  

Payday Loan Companies

Payday loans are another way to obtain a loan with no credit check. Nonetheless, it’s important to note that their annual percentage rates (APRs) are quite higher. Typically, the average payday loan has an APR of about 400 percent. Even more, most payday loans come with high fees as well as short repayment periods.

Title loans

Worried about your poor credit history? Relax. With title loans, you have a borrowing option that doesn’t perform credit checks. All you need is to surrender the title of your car to the lender as collateral for the loan. You’ll qualify for a loan amount that’s equal to the value of your car. In case you default on your repayment, the creditor might have to take ownership of your car. While this might be an incredible way to get quick money, the expensive combination of fees plus high-interest rates makes it a choice you should only consider when in dire need.

Read the Trims and Conditions Carefully Before Signing a Personal Loan

Once you’ve picked a loan, take the time to read the agreement’s fine print. Determine how much fees and charges you’ll be required to pay and make sure you understand the penalties or consequences of paying late. Remember, missing even one payment can negatively impact your credit score. So, make timely repayments and maintain a good credit history.

The Bottom-Line

Want a personal loan with a credit score? Well, the bad news is that it can be difficult. However, the good thing is that it’s possible. The above tips will help you secure a personal loan with a bad credit score. Also, the above articles give you explicit options when it comes to securing loans without credit checks. Ally yours at Personal Money Network and get your financial freedom back. Good luck!