Generally, you'll need good to great credit to qualify for a personal loan, which means you might have a harder time qualifying if you have a credit score of 550. However, there are several lenders who offer personal loans for bad credit. You may still qualify for some types of financing with a credit score of 550. However, personal loans are often unsecured loans, meaning that the lender gives you money based solely on the promise that you will repay the loan.
Because borrowers with lower credit scores are statistically more likely to not pay, lenders often charge higher rates to these borrowers to limit their risk. A credit score of 550 is considered poor, meaning you may not even qualify for some loans. Qualifying for loans requires a healthy credit score (26% improves your credit). The fastest way to improve your score is with the help of Credit Glory, which can identify and eliminate errors in your credit report (26% increase your score).
Although credit cards are usually the easiest type of credit to obtain with a low credit score of 500 to 550, it can also be quite simple to get some small personal loans, including short-term and installment loans. If you are able to do so, you may prefer MoneyMutual's bad credit installment loan rather than a cash advance because the installment loan gives you more room to repay it. Many personal loan lenders require a credit score of at least 600, meaning your options will be limited with a credit score of 550. Credible makes it easy to compare the rates of personal loan lenders willing to work with borrowers who have poor or fair credit.
In general, short-term loans will have less stringent credit requirements than installment loans, but short-term loans charge much higher fees and must be repaid once on the due date. They don't disclose your minimum credit score requirements, but they may also be worth considering if you're looking for a personal loan with a poor credit score. Unsecured personal loans with a credit score of 550 may be more difficult to rate than if you had a good credit score. If you can wait until after you spend some time building credit, you may qualify for a personal loan with a lower APR and better terms later on.
You may be able to get a personal loan with a credit score of 550, but it's probably a challenge. Final loan approval, rates and terms will depend on which car dealers respond to your loan application. Before you go ahead with a bad credit personal loan, make sure you consider the benefits and disadvantages. You can also log into your Experian account to use the Experian CreditMatchTM tool and quickly see if you are pre-qualified for personal loan offers from Experian partners.
There are several factors that can influence the cost of a personal loan, such as interest rate, APR, fees, loan term, and credit rating. Like home and car loans, it's incredibly difficult to get a personal loan and credit card with a credit score of 550. If you need a personal loan with a credit score of 550, it's only natural that you want to know who offers the best deal.