Getting a Loan With Bad Credit: What Are Your Options?


These days, it seems like the world revolves around our credit score. And it’s truly a pain in the behind when your credit isn’t the greatest, but you’re required to have a credit check done to, say, apply for an apartment or a credit card.

What happens, though, when you’re in desparate need of a loan but can’t qualify due to your credit score? Well, fortunately, there are still options for you, even with a bad score.

Look For Mistakes on Your Credit Reports (And Get Them Resolved)

Before applying for a loan with a poor credit score, it’s a good idea to double check to make sure your score is correct. It’s somewhat rare but possible for your score to be lower than it’s supposed to if your report contains an error or few. You can verify the truth behind your score by checking your credit reports. If you find errors, make sure to dispute them right away.

Try to Borrow from a Loved One First

When you apply for a loan, the lender typically performs a hard credit check, which in turn will reduce your credit score further. If this is something you want to avoid, then it might be best to try to informally borrow money from a family member or friend first (of course, with the intention of paying them back), especially if you only need to borrow a small amount.

Consider a Secured Loan

Lenders need to be able to trust that you’ll pay back your loan on time, or ever. Having a bad credit score doesn’t give lenders faith that you’ll be able to make that happen. However, when there’s something for you to lose on the line, you’re more likely to pay back, and to the lender, that gives them more hope.

That’s what a secured loan is for. You put down a collateral, which is kind of like a deposit, of something valuable like a car or expensive jewelry in exchange for getting approved for the loan. If you don’t pay back your loan, your collateral will be taken by the lender. It’s only fair.

There are many different types of secured loans you can apply for, from secured auto loans to more specific loans like a small business loan for women with bad credit.

Get a Co-Signer

You already know that lenders are more likely to approve you for a loan if you have good credit. Your credit score, after all, gives them a better idea of your financial history and responsibility. And no lender is going to trust a borrower who doesn’t take their finances seriously.

However, if someone with good credit co-signs on your loan, this gives the lender better security as this means they’ll have a second, and more reliable, option to turn to in case you aren’t able to pay back your loan on time.

Settle for a Loan with a High Interest Rate if You Have to

Not all loans require you to have pristine credit. Some lenders will approve you for a loan even if you have an unfavorable score. However, these come at a cost in the form of a high interest rate. As unfortunate as that might be on your pocket, if a high interest rate loan is the only form of financing you can get approved for, then it’s surely better than nothing.


It seems ironic that you normally have to have a good credit score to get approved for a loan. After all, usually the individuals who need to borrow money don’t have the best credit. On the bright side, there are multiple options to get financing for those who lack a favorable credit score, from a secured loan to high-interest loans.

About Author

LaDonna Dennis

LaDonna Dennis is the founder and creator of Mom Blog Society. She wears many hats. She is a Homemaker*Blogger*Crafter*Reader*Pinner*Friend*Animal Lover* Former writer of Frost Illustrated and, Cancer...SURVIVOR! LaDonna is happily married to the love of her life, the mother of 3 grown children and "Grams" to 3 grandchildren. She adores animals and has four furbabies: Makia ( a German Shepherd, whose mission in life is to be her attached to her hip) and Hachie, (an OCD Alaskan Malamute, and Akia (An Alaskan Malamute) who is just sweet as can be. And Sassy, a four-month-old German Shepherd who has quickly stolen her heart and become the most precious fur baby of all times. Aside from the humans in her life, LaDonna's fur babies are her world.

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