How Can I Get A Loan With Bad Credit In Avondale, Az?

When hard times are upon you and you need cash fast, you might be stuck wondering how you can get a loan with bad credit in Avondale. When your credit score drops below 601, you are in the same boat as 30% or more of the American population. It can be incredibly difficult to have bad credit when you are in need of a loan, a credit card or mortgage.

The good news is that you still have options.

Why Is My Credit Score So Low?

Low credit scores can be caused by numerous reasons. For some, it may signify a lack of credit history. For others, it is likely that late payments or no payments were made. Let’s explore these reasons further:

  • Utilization rate is high: this means that you are overusing your credit which may appear that you are close to defaulting on a payment, even if you haven’t.
  • High balances on credit cards: even just one high balance on a credit card will knock your credit score down a few points.
  • You have applied for too many accounts: every time company does a hard inquiry on your credit score, you get docked points.
  • Defaulting: of course, not paying a debt does not look good on your credit report. Even just making small payments is better than ignoring it altogether. Do not let an unpaid bill get reported to collections.

How Can I Get A Loan With Poor Credit In Avondale?

As stated earlier, you can still get a loan, even if your credit is low or poor. You should reserve these instances if you need a loan with poor credit when you are in a true emergency. In Avondale, you can get a loan by opting to apply for a title loan.

A title loan in Avondale can be applied for at 1 Stop Title Loans and Motor Vehicle Services. In this scenario, your credit history will not even be checked. What you will need however is your vehicle to use as collateral and proof of income. Imagine applying for a loan and having cash in hand the very same day! Now, with an auto title loan, you can anticipate higher interest rates than traditional loans, but the process is generally quick and easy.

Another option for getting cash without a great credit history is to ask your family or friends for help. It can be a very humbling experience to ask loved ones for help during trying times. Keep in mind this can also be a very stressful situation as borrowing money from friends or family can be burdensome on your relationship. This approach also will not help or hinder your credit score as it stands.

Next, you can find a co-signer. This is similar to asking a friend or family, but in this instance (if approved) you can work on bumping up your credit score.

Lastly, you can apply at a credit union. Sometimes, credit unions have options for people with below-average credit scores. Usually, the interest rates will be higher and the approval process takes longer.

How Can I Improve My Credit Score?

Credit scores are used to determine the chance that you will pay back a loan in full. The high-risk category usually begins when your credit score drops below 650. When this happens, it becomes near impossible to successfully apply for a loan or credit card.

If you find yourself in the high-risk category, you do not have to be banished there forever. You can improve your credit score by doing a few simple things.

First, if your utilization rate is high (debt to limit ratio), you can request to increase your credit limit. Just call your lender and ask if the limit can be raised. The best thing to do is pay your debts down, but you can also ask for an increase to make this limit look better.

Second, you may also find mistakes in your credit report. This does happen and if it is directly affecting your score, you should report it immediately. Reporting errors is free, but it can take time.

Next, if your credit score is low due to a lack of history, you can fix that too. However, it is time that heals that issue. What you do in the meantime is keep up with all your payments, without defaulting, and keep that debt to limit ratio as low as possible.

Lastly, do not close an account. Closing a credit card account can make your history essentially disappear and you will lose points.

Bottom Line

Ultimately you do have options if your credit is bad or you lack history. When it comes to getting a loan, you only want to go down that path in a case of a true emergency. Now is the time to improve your score and keep up with your current payments.