One of the biggest misconceptions about personal loans is you can’t get a loan with bad credit.
Similarly, not everyone knows how to get an installment loan with bad credit, even if they know it’s possible. The task can seem daunting, and fear of rejection can easily kick in.
Fortunately, Lift Credit is here to break down your options and everything you need to know about personal loans with bad credit, so you can feel confident in applying for a loan today.
What is Considered Bad Credit?
A bad credit score is typically below the 630 mark on a score of 300-850. Bad credit can result from several factors such as late payments, collection amounts, defaulted loans, etc.
Here’s the good news: It’s not the end of the world for your finances. When you’re in a bad credit position, you won’t qualify for the best cards, rates, and loans on the market, but you still have options.
If you need a personal loan, it’s always a good idea to first learn more about installment loans and how payments work so you know what financial responsibility you are getting into before applying. This will prepare you for a loan, and help prevent further worsening of your credit.
How You Can Start Improving Your Credit
In addition to gaining more financial literacy, you can also work on improving your credit at any time—even while using an installment loan. Focus on making every payment on time to start. Once you have that down, you can rebuild your credit score by:
- Using a secured credit card
- Becoming an authorized user of a credit card that belongs to someone with good credit
- Paying off any collections amounts
- Paying current bills on time
- Reducing other debts
What to Look for When Comparing Loans
Now that you know you can get an installment loan with bad credit, it’s time to research and compare. Get quotes from a few different lenders, preferably ones that explicitly state they work with bad credit. Once you have a few quotes, compare all components of the loan, particularly rates, terms, fees, and reliability—not just the monthly payment amount.
While a small monthly payment may seem great at first glance, higher monthly payments with a quicker repayment timeline save you significant money in the long-haul. When it comes to reliability, avoid variable-rate loans as the interest rate could rise.
Choose a Loan Provider That Works Well with Bad Credit
The most important thing to consider when applying for a loan with bad credit is applying for a company that advertises working—and working well—with bad credit. While being rejected for a loan doesn’t directly hurt your credit score, multiple hard credit inquiries will.
With this in mind, your goal is to get approved on the first try to avoid facing an even worse credit rating.
Apply for a Loan with Lift Credit
Lift Credit is a company that will help you get a personal installment loan quickly and easily, even with a bad credit score. On top of that, applying with Lift Credit does not affect your credit score, as some loan applications can.
The last thing we want you to worry about is ending up with an even lower score. Get started with Lift Credit today, and start taking steps towards better finances.