Are you looking for personal loans credit score under 500? Well, as you know, it could be difficult to qualify. However, this doesn’t mean that all hopes are gone since there are ways you can get a low credit score personal loan. A credit score under 500 is considered poor credit.
This means that you are likely to encounter difficulties borrowing if you have a 500-credit score for various reasons. One of the major reasons is that most lenders don’t believe that you can pay back the loan when you have a poor credit score.
While most lenders won’t even consider your application if you have a credit score under 500, you will be glad to hear that there are other options. But you must convince the lenders that you are capable of repaying the loan to be considered. If you are looking forward to getting a personal loan, then you can make use of these
Top 5 ways to increase your chances of qualifying for the loan
1. Rebuild Your Credit
This may sound obvious, but if you have a credit score at 500 or slightly under then you can focus efforts on rebuilding the score. Although the credit score might still fall below average at the initial stages, it’s worthy. As you increase your credit score, you improve your chances of qualifying for personal loans and this will enable you to access a wide range of lenders.
But in order to rebuild your credit score, it is important to find out how the credit score is calculated. Once you know how it is arrived at, try to go through your credit reports and identify the areas that could be negatively affecting your credit score. By doing this alongside making regular and punctual payments on your loans, your credit score will be greatly enhanced enabling you to qualify for better loans in future.
2. Enlist a Cosigner
If your credit score can’t help you get a personal loan then you should consider enlisting a cosigner. A cosigner is a person, normally a friend or family member, who agrees with your lender to repay the loan if you default. So, the first step of this method involves picking lenders that accept cosigners. Once you have chosen the lender with favorable terms, it’s time to approach your potential consigner. This should be a person with a good credit score and who can accept to act as your personal loan co-applicant.
If your cosigner has a good credit history then the chances of you qualifying for a personal loans credit score under 500 are high. However, if you qualify for a loan with the help of a cosigner then you should be ready to make payment on time to avoid jeopardizing your relationship. This is why it is important to pick a person who is understanding.
3. Talk with Your Credit Union or Bank
Getting personal loans credit score under 500 is all about convincing the lender that you will repay the loan. Therefore, if you can talk with your credit union or bank and assure them that you won’t default then your loan is likely to be approved. Begin by researching about the minimum credit score required for personal loans by various lenders in your area. Some of the best places to start with are banks or credit unions that you are a member since they can access your financial profile and review you easily.
It’s worth noting that credit unions tend to have flexible lending terms and could be willing to consider your application. You can also try making inquiries with your bank’s loan department on how you can get a small loan. If you have been a member of the bank for many years then they might consider your application.
4. Borrow from A Friend or Family Member
One of the best ways to get personal loans credit score under 500 is borrowing from a friend or family members. This is because getting the loans don’t involve a credit check. So, if you know an individual with some extra cash then you should consider approaching them for a personal loan.
However, before making the commitment, it is wise to outline the agreement and terms. This should be followed by punctual payments to avoid damaging the otherwise good relationship with your lender.
5. Getting Quotes Lenders
If you feel like improving your credit score might take you sometime then you should consider getting quotes from bad credit lenders. To these lenders, you can easily qualify for personal loans since they don’t consider low credit score as big issues. You can try applying for a pre-approval to find out if you can be awarded a loan without having to make an application or be subjected to a hard credit check.
One of the lenders that might consider you even with your low credit score is OppLoans. With this lender, you still got a shot if your credit score is under 500. However, with such lenders, your approval depends on the amount of personal loan that you apply.
It’s no doubt that low or poor credit score can limit the credit options you have when you need a loan. But there are still a number of options that you can try for personal loan credit score under 500. The good thing is that some lenders only conduct a soft credit check and your poor credit score might not be an issue. Better still, you won’t be going through a credit check if you borrow from your family members or friends. While the options are plenty, these 5 ways are some of the best that could guarantee you a personal loan without much struggle.
However, regardless of which method you settle on, it is important to rebuild your credit score at all cost. This means that you should consider lenders who can add positive value to your credit score. Improving your credit score will open new possibilities in the future and you won’t have to hassle when you need a personal loan. Besides, there are high chances of qualifying for increase loan amounts with above-average credit score. Check out our guide on 450 Credit Score Personal Loan and Private Personal Loan Lenders Without Credit Checks for more information on personal loans.