People that have good credit scores are considered a minority in this day and age. A lot of consumers have amassed large amounts of debt that they are struggling to pay off. This has made it rather difficult for many people to borrow money because they now have bad credit. All hope is not loss though. There are still ways for people to borrow money even if they have a poor credit history that resulted in a bad credit score.
- Peer to Peer Lending
One of the best things to consider if you have bad credit is peer to peer lending. This is a concept that has become very popular because it allows people with money to lend and acquire higher rates of return. This has become the concept that has allowed people that have a poor credit history to bypass many requirements that traditional banks require. There are websites like
- Credit Unions
The traditional banks may have strict requirements, but credit unions do not operate under the same rules that traditional banks operate under. This is why these banks have often become a resource for so many that have less than stellar credit scores. Credit unions rely on membership so people that sign up for some type of banking or savings account at these branches will increase their chances of acquiring a loan.
- Home Equity Loan
The home equity loan is also a nice alternative to the traditional loan. People with bad credit can rely on the home equity loan in most cases because this type of loan is not based on the entire credit history of borrowers. This history of the borrower in most cases is linked to the payment history for the loan. If people have been making payments on their mortgage and they have equity in the home there is a good chance that they can get approved for a loan.
- Co-Signer Loans
When a burrower has bad credit there is the option of acquiring a co-signer loan. Having a family member or spouse with good credit can instantly improve the chances of getting the loan approved. What this basically does is make the co-signer responsible for the payments in the event that the primary burrower is delinquent with the loan payments.
- Cash Advances
The borrower that wants to skip the lengthy application process, credit history check and wait period will benefit from cash advance or payday loans. This has become rather popular for a large number of people that may only require a small loan until they get paid. Credit history is not really questioned here. This type of advance is based much more the employment of the borrower. A person that is borrowing from a cash advance location will need a W-2 and a checking account. They have to verify employment, but once this is done there is a high chance that the loan will be approved.
Improving Your Credit Score
When people make the decision to borrow money they should obtain a copy of their credit report first. They should make efforts to start cleaning up their credit history as they start looking for lenders. Making a conscious effort to improve the credit score can benefit borrowers.