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From the Experts at Credit.com

How to Get a Personal Loan With Bad Credit

by Lucy Lazarony

How To Get Personal Loan With Bad Credit

Wondering how you will ever get approved for a personal loan when you have bad credit? These tips and strategies may help.

Find out your credit score

You don’t need perfect credit to be approved for a personal loan but it is important to know your credit score before you apply. The free Credit Report Card shows you multiple credit scores and breaks down the important factors that impact your scores. In addition, you’ll also find credit offers from lenders who may be willing to offer you credit. Checking your own credit reports and scores does not affect your credit score in any way.

Shop local

Next, research minimum credit score requirements for personal loans from lenders in your area. Start with your bank or credit union. Credit unions in particular may have more flexible lending standards and may be more willing to offer you a small personal loan. If you’ve been at the same bank for years, you’ll want to reach out to the bank’s loan department. Find out if your credit score would qualify you for a personal loan.

Limit your loan applications

Each loan application that you submit triggers an inquiry into your credit. And each inquiry lowers your credit score by a little bit. So, when you decide to start applying for a personal loan, don’t apply for every loan you come across. Only apply for a loan from a lender that you trust with lending standards that you meet. You may be able to find the minimum credit score that a lender requires for a personal loan on the lender’s website.

Only consider reputable online lenders

When you hop online, you’ll be able to find plenty of lenders promising loans with no credit check to people with damaged or bad credit. Be cautious. These websites may be nothing more than advance fee loan scams. According to the Federal Trade Commission, a lender that doesn’t seem interested in your credit history is a big red flag and could indicate that the website is fraudulent.

Double-check an online lender’s background before applying for a loan. Contact your state Attorney General’s office or your state’s Department of Banking or Financial Regulation to find out if a lender is legitimate and registered to do business in your state. To check on customer complaints, visit the Better Business Bureau.

Some legitimate online lenders offer personal loans to people with less-than-perfect credit. So don’t overlook these options if you are turned down for a loan from a local bank or credit union.



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  • Meet Our Expert

    lucy_lazarony GravatarLucy Lazarony is a freelance personal finance writer. Her articles have been featured on Bankrate, MoneyRates, MSN Money, and The National Endowment for Financial Education. Prior to freelancing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American International University in London. She lives in South Florida.
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