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Have bad credit but need a loan? Heres some info - Maildollar - Bringing Financial to your email
HOME  /  Have bad credit but need a loan? Heres some info

No one wants bad credit but for some reason many people still end with them.

In no way having bad credit means you are not an optimal person. However your credit score is a track record of how good you use and repay your loans. So if having a good score makes it easier to get a loan with good rates, having a bad score logically does the opposite.

According to a study done by the Federal Reserve, almost 40% of people surveyed who wanted some form of credit did not actually apply for it as they thought they might not be approved.

But remember, bad credit does not always mean you will be rejected for a loan.

Here's some info about getting loans with bad credit:

Credit Score: Your credit report GPA

In college, you took various subjects like Math, Science and History etc. You receive grades for each of those subjects and at the end the semester, you receive one single combined score, your GPA.

This is the same concept for credit scores and reports. Your credit report contains a list of who you owe and how much you owe to them (eg, bank A and bank B) and ultimately, how well you pay off money owed to them.

When a new lender or bank wants to consider you for a loan application, this is one of the first things they look at to assess your credit worthiness.

What is bad credit exactly?

There are many ways to generate a credit score but FICO is go to model that most lenders use when evaluating loan applications. FICO scores range between 300 and 850 as listed below:

• Poor: 579 and lower
• Fair: 580–669
• Good: 670–739
• Very good: 740–799
• Exceptional: 800+

As of 2017, the national FICO average score was 700. However, people with scores in the far to poor range (eg, less then 670) may experience issues getting approved for certain types of loans.

Interested to estimate your FICO score? Use this calculator below:


There are many factors as to why someone can have a bad credit score. Missing payments, maxing out credit or simply being a little late in payments are some of the more common reasons.

Different lenders different credit requirements

Every lender has its own cutoff for credit scores. If your score falls below this point, it may be difficult to get an approval for a loan from them.

The opposite is also true, if you have a good score, you are more likely get a loan AND preferential rates from them.

For example, to get an FHA mortgage with a low down payment (~3.5%), you will need credit scores of 580 or higher. Financial institutions like banks or credit unions might want you to have credit scores in the 600 or better to get a conventional mortgage.

However, not all is lost as alternative lenders such as payday lenders will have much lower credit score requirements.

Ah... Then if I have a bad credit score, can I still apply for a loan?

While you could apply for a loan with a bad credit score, it is best to look for lenders who can work with bad credit (they do exist but they are hard to find), instead of simply going to the lender at the store in your local district.

The good news is, here at MailDollar, we are always on the lookout for good lenders of all sorts, including those that work with bad credit, so do check out your mailbox for offers found by us from time to time!