Don't Qualify For Any Loans? 3 Tips For Obtaining Loans With Even The Worst Credit History

30 June 2015
 Categories: , Articles


If you need a loan and have bad credit, then you may think your odds of obtaining the loan you desperately need are low to non-existent. Before you throw in the towel and decide that your only option is to save up the cash you need for that vehicle you desperately need or to begin that small business you have been dreaming of starting, follow these tips for getting the cash you need. 

1. Obtain a Copy of Your Credit Report and Look for Mistakes

While you may think looking for mistakes on your credit report that are lowering your credit score will be like looking for a needle in a haystack, statistics show that an astounding one in every five Americans actually have a mistake on their credit report. While some common errors sound worse than others, they can all impact your ability to obtain that loan you need. 

The most common credit-report errors range from small ones, such as incorrect personal information, to huge ones, such as debts that were never taken off credit reports after the seven-year period the law dictates they can remain on them. No matter what a mistake turns out to be on your report, it can have a huge impact on your ability to obtain a loan. 

For example, even a small mistake in your personal information can lead to a lender giving you an immediate rejection due to the fact that they cannot verify your identity. The lender may even decline your loan due to the fact that they think you are falsifying your legal address on your credit application. 

If you have a debt that was never removed from your report after the seven-year period it is allowed to remain on it, then that could have a huge impact on your credit score. Depending on how large this debt was, it could also lead lenders to believe you are in so much debt that there is no way you could afford to pay back the loan they provide you. 

To check for credit-report errors, request copies from all three credit reporting agencies. You are entitled to one free report from each agency every year, so these reports will be free if you haven't requested them yet during the last 12 months. Then, go over each report with a fine-toothed comb to check for any errors that could impact your ability to obtain a loan now or in the future. 

2. Use Those Reports to Look for Easy Pay-offs as Well

Once you have copies of your credit reports and have examined them for errors, look for small debts that you can pay off easily. Many people don't realize that small debts, such as one bill from your family doctor you forgot to pay or a charge for a cable box you never returned, can really take a toll whether a lender trusts them to pay off a loan they provide you. 

While information about how each debt affects your credit score used to be kept a mystery, FICO has been less elusive lately and released some information about how certain debts and credit report "dings" affect credit score, such as the fact that a maxed out credit card lowers your credit score by 10 to 45 points. Use this information to your advantage when attempting to repair your credit score and report. 

3. Look for Lenders That Don't Take Your Credit History into Account

If you need money fast and don't have the time to clean up your credit report before obtaining it, then don't worry, because there are options for you as well. Remember that you can always obtain loans from pawn shops by providing collateral for them to hold onto until you repay the loan. The more value your collateral has, the more cash they will allow you to borrow. 

Items that can get you the largest loans from pawnshop lenders include jewelry, pricey electronics, and often even vehicles. Jewelry is often the easiest item to use as collateral, as it is easy to transport and most pawn shops will take it, as they know they can sell it easily if you were to default on your loan. 

If you think obtaining a loan you desperately need with your credit history is impossible, then follow these tips. If you need cash now, then look for a lender that will take your jewelry or other high-value belongings for collateral while you work on correcting mistakes and repairing your credit history. For instance, a pawnshop like Sol's Jewelry & Loan might be willing to accept jewelry as a collateral for a cash loan.