Those who have a poor credit score often find it difficult to qualify for unsecured loans. But the fact that you have a bad credit does not mean that your expenses won’t be there. You still have to pay those utility bills, you may need to consolidate debts, cover the tax bills, pay for repair etc. And what if you can’t keep your home or car as a collateral? Do you have any other borrowing options at all?
Well, to tell you the truth, yes you have! You can get an unsecured loan even when your credit score is not-so-fair. Here are some good tips to help you out.
Hire the service of a broker – If you are trying to get an unsecured loan with bad credit, consider consulting a broker. He will help you contact many lenders who provide bad credit finances. Brokers are familiar with a number of lenders and banks and therefore, successfully help borrowers with bad or good credit score get loans that fulfill their requirements.
Work with a co-signer – If you are going to apply for an unsecured credit with a poor credit score, it is advised that you take the help of a co-signer. This person can be from your family, friends or acquaintances and must have a good credit score as well as enough income to pay off the amount. He/she will apply for the finance with you and promise to repay the loan if you fail to do so within the given time-frame.
Though initially it sounds very attractive to get the help of a co-signer, it’s not that easy always. Remember, your co-signer is completely responsible for the amount that you borrow and therefore won’t be able to borrow much for himself until and unless your loan is paid off. If he plans to buy a home in the near future, it might become impossible. If you become unemployed or get injured during the repayment period and fail to pay the installments, the co-signer will be answerable to the lenders. If he can’t afford the payments, his credit score will suffer.
Apply for bad credit loans – There are ways to get unsecured loans. There are companies that exclusively deal with people with poor credit scores. They will match you with lenders who are not so interested in the past credit records of the borrowers. Naturally, these lenders don’t ask to furnish any credit report as well. The only thing that you require is a valid bank account.
Try to improve your credit score: This is probably the most natural option to qualify not only for unsecured loans but also for all sorts of finances. An improved score will always help you get approved for any type of secured or unsecured loans. Factors that affect your score include available credit to your account, debt and credit ratio, and collection accounts. If you have a number of bills that are overdue, paying all of them will help you improve your score as well as increase the possibility of qualifying for further credit.