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How to Get A Loan with Bad Credit?

Many people have a bad credit score, which can make it difficult to get approved for a loan. But bad credit does not mean no credit! 

There are lenders and brokers who specialize in making loans for people with poor credit scores, and there are ways you can improve your own score if it is not very high right now. 

In this article, we will discuss how to get loans for bad credit and what steps you can take to improve your chances for being approved.

Check Your Credit Report and Credit Score

Check your credit report and credit score. If you’re planning to apply for a loan, it’s important to understand how your credit report and score are calculated. 

Your credit report is a history of how you’ve handled other loans, as well as whether or not you’ve been responsible for paying them back on time. Your score is based on the information in your credit report and can range from 300-850 points.

A lender may look at three different aspects when calculating your FICO Score: payment history, amounts owed, and length of credit history. 

Investigate What’s Hurting Your Credit Score

As you begin to understand how your credit score is calculated, it’s time to start investigating what might be hurting it. 

Some factors are predictable and easy to manage, such as making payments on time or keeping a low balance on your credit cards. 

Others are more mysterious: Why did one medical bill cause my score to plummet? And why does one creditor report I can’t even remember hurt me so much?

You may find that there are some aspects of your financial life that need attention. Take an honest look at the following factors:

  • Amount owed (your debt-to-income ratio)
  • Credit history length and age of credit accounts
  • Recent inquiries (new applications for credit)

Any of these issues could be hurting your score, though you may also find that some of them are helping. For example, if you have several credit cards with low balances and no late payments, that’s a surefire sign of good credit management. Likewise, having a long credit history can help your score in many cases.

Avoid New Credit Inquiries

Every time that you request credit from a lender (or they accept your application), they will send out an inquiry to one credit bureau. These inquiries are logged as “hard pulls” on your report and affect things like how high your score is and how long it takes for that score to recover after each inquiry.

So if you have poor credit already (and especially if you’ve never had any credit before), avoid making any requests for new lines of credit until after you’ve been approved for your first loan with us!

Look for Lenders or brokers Who Specialize in Making Bad Credit Loans

If you’re looking for a loan with bad credit, look for a lender or broker who specializes in making these types of loans. 

Being a successful entrepreneur in the finance world, Mila Garcia, co-founder of iPaydayLoans believes that brokers can save your time of lenders searching by connecting you with one of the most relevant lenders in your area.

However, if you are approaching lenders online, without involving any broker in between, make sure that they should be willing to work with you and your unique needs. They should also be willing to work with you to improve your credit score and credit history so that they can better assess the risk involved in lending money to you.

Improve Your Credit Score

The first step to getting a loan with bad credit is improving your credit score. This can be done by:

  • Paying your bills on time.
  • Paying down your debt as much as possible.
  • Make sure all of your active credit accounts are in good standing (i.e., not maxed out).
  • Avoid opening new credit accounts until you’ve paid off the ones you have and established a history of paying them back.

When looking for loans with bad credit, it’s important to avoid applying for new credit cards or loans as well, because that will decrease your average age of accounts, which will negatively impact how lenders see you when they look at your FICO score.

If possible, try to keep the same amount of open revolving lines of credit over time. This will give them more data points from which they can predict future behavior.

Prove That You Can Repay The Loan On Time

When you apply for a loan, the lender will check your credit history. 

If the lender sees that you have been late on payments in the past, they may deny your application or give you a high-interest rate. This would make it difficult for you to pay off the loan and therefore end up making them more money than if they had given out a lower interest rate. 

So how can you prove that you won’t be late on payments?

If there are any mistakes on your credit report, contact your creditors and ask them to fix it. 

This includes any inaccurate information such as incorrect spelling of names or addresses or accounts that were closed but still listed as open accounts. 

If possible, try paying off all outstanding debts before applying for a loan so that when they run checks on your finances, they can see how responsible of an individual you are with money management skills and will be more likely to approve your application without hesitation.

Getting A Loan With Bad Credit Is Possible!

If you have bad credit, there are lenders who specialize in making loans to individuals with poor credit. You can improve your credit score over time by paying bills on time and reducing the number of inquiries against your name.

You’ll want to prove that you will be able to repay the loan on time, so make sure you have enough money available for monthly payments before applying for a loan.


So, you have bad credit but you need a loan. You’re not alone; many people are trying to get approved for loans with less than perfect credit scores. With a little research and some hard work, you can be on your way to getting approved for a loan in no time!