How to Apply

Your credit rating will go down if you are tardy in the repayment of credit facilities that you have availed of earlier. Credit rating agencies keep track of your payment history and will give you a bad credit report if you are a habitual defaulter. When you are in such a situation, it is best that you take steps to improve your credit rating and go in for some debt management. Even so, life has to go on, and you may be forced to look again for loans to buy something new which you consider essential or even to tide you over temporary stressful financial situations.

In such a case, you will need to look for loans with bad credit. Lenders will consider you a bigger risk and will, therefore, be wary of offering you any further credit. Your chances improve if you are an adult, a permanent resident and have been employed over a period of the previous six months and are continuing to hold a job. You also need to have a bank account to which the new loan can be transferred and from which payment installments can be received. Institutions that do afford loans to persons with poor credit scores will also ask for details of your income and the debt that you have. This action helps them to assess the capacity that you have for repaying any new loan that is sanctioned.

How to Apply
Before you add to your mountain of debt, you need to review thoroughly your financial position and give serious consideration to adding to it. As a person with bad credit score, you will have to accept certain compromises if you are to be able to get a new loan. The interest rates charged will be high, and your account will be under constant scrutiny. You must be sure that you can make the repayments from your present level of income. Some lenders may also ask you to take out some insurance as part of the repayment, and this can only increase the cost of the loan.

Your chances of getting a loan in spite of the bad credit score increase, if you can persuade somebody you know, family or friends to cosign the loan as guarantors. There is a risk for the cosigner as he or she will be responsible for the repayment in case you default. It can spoil your relationships in the future. The cosigner will have to be one who has an above average credit score, and the capacity to make the repayment. You can also get better terms if you have some assets that you are willing to pledge against the loan.

Getting loans with bad credit is not impossible, but you will do yourself no harm if instead you try and find other methods to improve your credit score and recast your finances so that you live well within your means. Any sacrifices or hardships that you do undergo will only result in improving your credit score and making it much easier to have access to finance at later dates.