Having bad credit is never good. While it doesn’t immediately disqualify you from applying for personal loans, you may find it harder than if you had good credit. You may also have to pay a far higher interest rate and fees for a personal loan with a low credit score.
There are several lenders who will consider your application for a bad credit personal loan. They will take your credit score into account, but not let it rule their judgement. The best way to ensure you’re approved; do your research and try to avoid lenders who will run a hard credit check on you, this will make your credit score worse.
One thing to remember is that you should nurture your credit score. Bad credit can impact many things. Let’s take a look into whether you can get a personal loan with bad credit.
What is a low credit score?
A low credit score is often known as bad credit. The credit reporting agencies within Australia compile your entire credit history into a report. The report is what your lenders look at when deciding whether or not to approve you for a personal loan with a low credit score. The report includes a credit score which is a number based on things such as:
- Your credit history
- Your age
- Where you live
Basically, the higher your score, the better your chance of being approved for finance and receiving favourable fees, rates and terms. While each individual agency has its different scoring system, it generally goes like this:
- Over 750- An excellent credit score
- Between 700-749– A good credit score
- Between 580 and 669– A fair credit score
- Below 580– A bad credit score
Usually, banks and traditional lenders tend to be wary of people who harbour a bad credit score. That is because they have an increased probability of falling behind on repayments.
How do I get a low credit score?
Negative events in your credit history can be very bad for your credit score. Negative events can be considered as:
- Having too many credit checks over a small window of time (credit enquiries). This is caused by applying for multiple loans.
- Missing or defaulting on loan payments (including credit cards)
- Going bankrupt
- Having credit applications denied
You can still get a personal loan with a low credit score, but it will be much more challenging.
How do I improve my credit score?
Improving your credit score certainly isn’t easy. However, there are many ways you can fix it. Positive credit events will help you. Some positive credit events are:
- Keeping your debts small and manageable
- Keeping up with your repayments
- Fully repaying your loans
- Making more than the minimum repayments on your credit cards.
Obviously, this isn’t a quick fix, but it is a fix. It is important to fix your credit as you can’t always get a personal loan with a low credit score.
If you are looking for a quicker fix then credit repair is a fantastic option. Credit repair experts can negotiate to get rid of defaults, credit enquiries, court judgement and black marks from your file but it does cost money. We recommend Clean Credit:
- They operate Australia-wide
- They have a no removal, no removal fee policy (in the unlikely event that they fail to remove a negative listing from your file, you receive a refund of your removal fee)
- Their success rate is over 90%
- Negative listings could be removed within as little as 30 days
- They are rated 4.8* on Trustpilot
- They are one of the longest-running credit repair companies.
Can I get a personal loan with a low credit score?
Getting a personal loan with a low credit score is not easy, especially with bad credit. It is far easier to get a personal loan with good or excellent credit. However, it is still possible.
There are some lenders out there who specialize in providing personal loans for people with bad credit histories. It is important to know that a personal loan with a low credit score may have higher interest rates and fees. As well as this, it is highly likely that you will need to secure your loan against a personal asset, such as a car or your mortgage in order to have any chance of approval.
Things to keep in mind when getting a personal loan with a low credit score
There are some important things to know when you get a personal loan with a low credit score. Here are some things you need to consider:
- Each lender will have its own policy. However, you will find it hard to get approved for a loan of more than $50,000 if you have a bad credit score.
- Bad credit personal loans come with a higher interest rate than usual. Make sure you do your research to find the best rate available to you.
- While lenders can be sympathetic, they have a process to follow.
- As mentioned above, you will most likely have to secure your loan against a personal asset to increase your chances of approval and to keep costs down.
- You may need to provide more documentation than you would for a normal loan to prove that you can afford your repayments since you will be classed as a ‘high-risk borrower’.
The bottom line of getting a personal loan with a low credit score
It can be hard to get approved for a personal loan with a low credit score. However, the Australian Lending Centre makes it easy. We provide a wide range of services including bad credit loans to people all around Australia to ensure that everyone has access to finance when they need it.
With an expert team and over 30 years of experience, we are a fantastic option. Contact the Australian Lending Centre today and apply for finance.
