3 Tips For Getting A Personal Loan When You Have Bad Credit

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Having bad credit makes it difficult for you to secure a personal loan, but it does not make it impossible. Here are three tips that will help you get a personal loan even if you have bad credit.

#1 Include Accurate Information

When you fill out the application for a personal loan, it is important that you include all the right information. For example, make sure that you put down the right address, place of employment, and income. Be prepared to back this up with documentation. For your address, a current bill will do. For your place of employment and income information, your tax documents or your most recent pay stub should help establish both of these facts.

#2 Explain Any Unfavorable Items

The second thing that you need to do is make sure that you examine your credit report before you apply for a personal loan. Make a list of any items on your credit report that make you look unfavorable to bank, such as a late payment on a loan or loan that you defaulted on.

Then, write a self-explanatory letter that is direct and to the point that explains the circumstances that lead to the negative behavior on your credit report. You should also include information about the steps that you are taking to overcome this previous negative behavior. For example, if you missed one payment due to losing a job, but have made every payment on that loan since, show documentation of all the payments that you have made sense then. This will show the bank that you are aware of the bad credit rating on your report and are taking steps to fix them.

#3 Offer Collateral

The great thing about personal loans is that you generally do not have to back them up with any collateral. However, if you have a very poor credit score and it looks like the bank is going to deny your loan request, you can always offer up a personal valuable asset that you fully own as collateral. For example, you could put your vehicle up as collateral or your home.

Just make sure that if you take this step, you have a budget plan in place to ensure that you will make every loan payment on time. Missing a loan payment will negatively impact your credit score and missing more than one payment could result in you losing whatever you put up as collateral for the loan. 

For more information, contact local professionals like Las Vegas Finance.