Loans For Low Credit Scores
The lenders in our network specialize in providing loans for those without perfect credit. Most use alternative credit scoring systems instead of the three big credit bureaus.
Getting a loan with 450 – 550 credit.
The requirements for payday loans are far less stringent than those for traditional personal loans. The first thing that you need is a source of reliable income. This does not have to be a regular job. It could be child support, a pension or any other money that comes in regularly.
Next, you need a checking account. This is what your lender will use to deposit your money and to take the repayment. They will electronically deposit the loan proceeds and electronically withdrawal the repayment.
Finally, you need a good contact number and address so that your lender can get in touch with you if needed.
If you have the above three things, you are ell on your way to getting your approval, even with credit in the 450 to 550 range. Individual lenders may have additional requirements but these are the basics.
Pros & Cons of Low Credit Score Loans
If your have credit scores of 450 to 550, you know that loans can be hard to come by. Few lenders want to give you a chance. Still, that does not mean that you should take just any loan that is offered to you. Loans come with pros and cons that you should know about.
The good thing about these low credit loans is that they are, obviously, easy to qualify for. They are the only source of emergency cash for many people in this country. Another positive is that they fund very quickly. In most cases, you will get the money that you need the very next business day. Finally, these loans are easy to apply for. There is typically no faxing needed and the quote form can be filled out in less than 2 minutes. Decisions are just as fast, which lets you get back on track with your life quickly.
The bad thing about low credit loans is that they have high fees associated with them. Your lender will be offering you a high risk loan which means that they will charge high fees, it is just the way it goes. Typical fees are usually around $15 to $20 per $100 borrowed although your lender may vary. In addition, loan terms are short with these loans. They are meant to only get you by until your next payday so they are usually due in two weeks or less. Finally, loan amounts are limited. Depending on the state that you live in, your loan can be up to $1000.
Improve Your 450 to 550 Score
Now that you have solved your current loan needs, you can turn to improving your credit score so that you can more easily obtain a loan in the future. Luckily, improving your credit from your initial score of 450 or 550 is not that hard. It is actually quite simple, it just takes a bit of financial discipline.
Step One: Pay Your Bills On Time
This is the single most important thing that can turn a fair credit score into a good one. You need to pay your bills on time. If you have a late pay on your credit score, you can overcome it. Start paying your bills on time and in six months, you should start seeing your score rise. After a year, your score will be vastly improved over your current score of 450 to 550.
Step Two: Report Credit Score Errors
Pull a copy of your report by either asking the bureaus for your free annual report or by using a service such as Credit Karma. Check for errors and dispute anything that is not correct. The bureaus will contact the creditors and they will have a set time to respond. If they do not respond with proof, the negative information must be removed. Just getting one or two negative pieces of information removed could net you a 30 point increase on your score. If you are at 450, that gets you on your way but if you are at 550, that would get you to a fair rating.
Step Three: Get New Credit
If you have no credit accounts, apply for a starter credit card. This might be a low limit card with an annual fee or it could be a secured credit card. Either will get you some credit history that will eventually help you build your score above the 450 to 550 range that you are sitting at right now.
Step Four: Keep Balances Low
If you have existing credit, you need to keep the balances below 30 percent for the best results. Creditors like to see that you are not overextended and that you have credit available to you.
Last Word on 450 to 550 Credit Score Loans
As you can see from the above information, it is possible to get approved for a loan if you have a low credit score. The loans will be a bit limited in many terms but they can get you the money that you need in an emergency. You should use these loans cautiously and only take out just as much as you need and no more. Remember, the more that you take out, the more you will have to repay.
Once you solve your temporary financial problem, you should then turn to ways to improve your credit score. A score in the 450 to 550 range is very limiting and can cost you thousands of dollars in higher interest payments on loans. Luckily, improving your score is not rocket science. You just need to show lenders that you are responsible with the credit you have by not overusing it and that you pay your bills on time.