When you need a loan to make a purchase like a car or a home, you might be very concerned about your credit score measuring up--especially if you have a blemish on your credit report for missing payments due to temporary financial hardship or medical emergencies. While most traditional lenders require above average credit to get you a loan with a low interest rate, you can still get a loan, even if you have less than stellar credit but can prove you are in a better financial situation now.
Step 1
Gather up anything and everything that could prove to a potential lender that you will be good for your financial obligations. Bring in a bank statement showing your savings or evidence of a recent job promotion and pay raise. Show how you have kept up-to-date with your bills for the past several months and indicate that you are a much more reliable candidate than your credit history shows.
Step 2
Go into the loan process knowing your need for the money. Have a specific amount of money in mind that you would like to borrow and be specific about what you will be using the money for (paying off credit card debts, buying office equipment, renovating your home, among others). You should also indicate how much you can afford to pay back per month and in what period of time you can have the loan completely repaid.
Step 3
Acknowledge that you will likely get a high interest rate on your loan. Having average or poor credit can cause you to see an interest rate as high as 18 percent, but if you really need the money, this might be worth it to you, especially if you will be paying back the loan quickly.
Step 4
Skip the bank and seek out a different loan source like a payday lender or a high-risk lender. You might also wish to consider approaching your family or friends for a loan. Be equally professional in your approach, even to family, presenting a precise plan for repayment.
Step 5
Beware of scams. There are many lenders out there that specialize in lending to those with bad credit, but even if you are approved for a loan, there might be a high cost. Very high interest rates, fees or even paycheck deductions might occur, which can make the loan lose its luster and cause you to lose out on more money.
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