- CREDIT UNIONS. Credit unions are non-profits that are owned by their members. Earnings are passed along to their members through lower fees. When applying for a loan from them, they tend to look at your overall situation, and not just your credit score.
- FAMILY AND FRIENDS. You might get friendlier terms from family and close friends. Just make sure you pay them back and on time.
- PEER TO PEER LENDERS. There are various networks such as Prosper and Lending Club, where you can borrow money through these platforms where people can bid for your loans with different interest rates.
- ONLINE. There are some resources online that can grant you loans by filing online.
How do you rebuild yourself with bad credit?
Your credit score adapts based on any changes to your credit. So if you want to improve your credit, you can start simple and work slowly to rebuild your credit score. Here are a few things you can do that can help:
- FIX YOUR CREDIT CARD BALANCE. Paying off your credit card debt first has a faster effect in improving your credit score as compared to bigger loans, so if you need immediate results, start with this.
- USE THE CREDIT CARDS LESS. Since you are still paying off your credit card debt, don’t add to it. You should try for a 10% utilization rate for best results.
- LOAN CONSOLIDATION. If you have multiple loans and the monthly payments for these are hurting your expenses, consolidate your loans into one. If you also have credit cards, try to consolidate them into one card and pay if off.
- PAY BILLS ON TIME. When you pay your bills also matters when it comes to your credit score. Pay your credit cards, loans, utilities, rent, and other bills promptly, or within the grace period allowed.
- CLEAN YOUR CREDIT REPORTS. You are entitled to one free credit report per year. Go through it and make sure that paid off accounts (especially delinquent ones) get wiped off from your report. While it gets removed automatically, there are times when these black spots stay in your report, and you need to be diligent in checking if everything in your report is accurate.
While you are currently down with bad credit, you can still find lenders who are willing to work with you. The rates you will get will be higher since you have low credit score, so if you need money now, then you could take it, and use the loan responsibly to help increase your score. If, however, you can still hold off, even a few months, work on paying off some of your debts and improve your credit a bit before getting a new loan.
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