How to Get a Loan with Bad Credit

Learn how to get a loan with bad credit from the team at AmONE! Our loan matching service will pair you with trained bad credit loan lenders who can help you.
man with bad credit
Written by:
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Kristin Marino verified

man with bad creditHaving bad credit can make things more difficult. Bad credit can affect everything from being approved by loan lenders, to getting a credit card, to having to place a security deposit on utilities like cable and electricity.

So what can you do about your bad credit? Especially if you are in need of money? There are options available. First, you should know that while there are ways to get a loan with bad credit, they are limited. You may be able to get the financing you need for repair work, consolidating your debts, or paying off a bill, but due to your credit history you’re not going to find your perfect loan. The upside to this is that by doing research and understanding what the alternatives are, you can find the bad credit loan lenders that will help you with the money you need now and the good credit you need to build.

What’s In Your Credit Report?

Once you know that your options, while out there, are restricted, you can move on to the next step, which is knowing what your credit actually is. This is important as your credit might be in better shape than you think it is. Not only might you be in a better borrowing position than you previously thought, there may be errors on your credit report. These errors can be fixed, leading to an improvement in your credit history and raising your credit score.

You’re able to obtain your credit report from each of the three major credit bureaus (Experian®, Equifax®, and TransUnion®) for free. By law, you can get a free copy of your report once every twelve months from the website. If you haven’t checked your report recently, it’s worth the time to request the report and to go over each item.

If you do find mistakes on your credit report, you can either notify the credit bureaus directly or you can work with a specialist who can help you challenge and potentially remove any negative items on your report.

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Finding The Right Loan For You

What’s next after checking your credit? Determining what type of loan will be the best for your credit situation. Again, as with fixing any errors on your credit report, you can do this yourself, or you can get help in finding a trusted loan lender who is willing to work with someone who has bad credit. There’s also help available if you’re just not sure what sort of loan lender might be right for you.

For people with bad credit, many find that it’s easier to qualify for a secured loan. This loan type means that you put up collateral in order to borrow money from a loan lender. Secured loans aren’t without risk; for example, while a lender may approve your loan request based on your collateral, if you’re unable to keep up with the loan payments, you may lose that property. If you own a home or an apartment and have equity, you could borrow against that equity.

You could also use a car you own free and clear as collateral, or, if you’ve paid off a large portion of your car loan, you may be able to obtain a car title loan. Like with using a home you own as collateral, using a car you own, or the car title, comes at the risk of losing the car should you be unable to make payments.

Another way to get a loan with bad credit is through an unsecured loan. It can be more difficult to obtain unsecured loans for bad credit as loan lenders rely solely upon your credit scores and credit history. Whereas you would you put up something you own as the collateral on a secured loan, an unsecured loan doesn’t require collateral. Instead, these loans come at a much higher interest rate and may be more difficult to qualify for.

Additional Considerations

In addition to the type of loan that works best for your financial situation, you should also consider whether or not taking out the loan will improve your bad credit. Unless you have an immediate need for the money (such as an emergency), it may be better off in the long run for you to focus on improving your credit. If you do need to obtain financing, make sure that whatever loan you apply for will be reported to the credit bureaus. You want to have this information be recorded as a part of your credit history, which, in turn, should help to improve your scores.

So, how do you go about finding a loan lender, or deciding on which loan is the best for you, when you have bad credit? You can start locally by checking with the banks and credit unions in your area. When it comes to doing online research, make sure you only use large, well-known, and well-respected websites. You can also call AmONE if you have any questions. Our free service is available either online through our website or via telephone. We have financial search specialists who are able to answer your questions regarding getting a loan with bad credit, the best loan lenders available in your area, and what you can do to improve bad credit. You can call us toll-free at 888-401-0330 to learn more. Again, our service is free and there is never any obligation. We’re here to help.