Though a good credit score of around 730 will attract better interest on credit products and loans even with 500 credit you can still get some good loans and it’s not impossible. Today we will be taking you through how to get a loan with a 500 credit score, what a good credit score is and how to build it, and how to get a loan even if you have a bad credit score
We will enlight you on not leaving paycheck-paycheck and making sure you secure your next paycheck.
What is a Credit Score? (How to consider its good or bad credit score)
A credit score is a creditworthiness of a consumer or borrower the lender uses it to know the potential of the borrower. It usually ranges from 300 to 850.
720 above is a good credit score, the higher the better. 500 is considered a poor credit score and getting around 620 will make it fair.
The importance of you building loans for your 500 credit score
Your credit score is important and you really need to build it because no matter what you want to get they will check your credit score even if you want to get a car, apartment, or some other things on a loan
As we discussed earlier lot of things accumulate to bring down your credit score like unsalted loans on time, late payments, or if you have to take too many loans.
You can do these 5 things to build your credit score
- Start avoiding high-interest loans that will make you default
- Make sure your total loan is under %30 of your credit limit! Do not take too many loans
- Try your best to maintain no failed or late payments for at least 12 months
- Pay your bills on time and it is very important
- All your credit cards should be at least 50% of the available card limit.
You Can Get a Mortgage Loan With a 500 credit score
Fighting low credit score you really need to look at the reason you get that low credit score maybe because of late payment or default payment of a payback loan. This makes banks disapprove your loans
Then if that’s you then you need to start building your loan history with a small automatic repayment utility or cell phone without defaulting any payment again. These will quickly build your loan history.
Make sure they are in small quantities so that interest will not be much and also pay back if you have any hanging debt maybe a car accident, medical bills, or some other bills.
Remember all this will increase your credit score over time and strengthen it.
hen you can start multiple applications for a mortgage loan and even if your credit score has not skyrocketed up your history will make some accept you.
Can You Get a Personal Loan With a 500 Credit Score?
Of course, you can get a personal loan with a 500 credit score. Just know that not all lenders accept that 500 credit score there are some lenders that are specific on bad credit loans.
Those bad credit loan lenders always charge a higher interest rate
Why did Bad Credit Lenders always charge high Intrest?
They do charge high because the bad credit score already indicates that the borrower is a credit risk taker so they will either collect collateral to back it up or even increase the interest rate.
Where To Get A loan with a 500 credit score
There are a lot of companies you can get a loan even with a bad credit score we discuss a few of them in these articles we wrote about Where And How to Get a Loan For Bad Credit in USA.
But here are a few of them:
- Upstart
- Upgrade
- Lightstream
- Discover personal Loans
- Lending Point
- Lending Club
- OneMain Finance
- Best Egg
- Universal Credit
- Happy Money
Try To Apply For The Right Loans
It is always important to know the right loan to apply for so as not to get so many rejections even with less than a 600 credit score you just need to apply for loans from bad credit lenders (The few mentioned above)
You can apply for auto loans or student loans if you have a less credit score.
If you are to try multiple loans with a bad credit score of 500, 600, or lesser then you need to try multiple bad credit lenders.
Conclusion
As you already know you can get a loan with a 500 credit score but you will need to get it through bad credit lender companies and you need to take some steps to improve your credit score too so that you can get a lesser interest loan later.