Home Finance A Step-By-Step Guide On How Can You Borrow Money If You Have Bad Credit In 2024

A Step-By-Step Guide On How Can You Borrow Money If You Have Bad Credit In 2024

by Nina Smith

Your credit score refers to that three-digit number that lenders check so that they can decide on whether or not you should be granted a specific loan you’re applying for. This credit score will generally give these lenders information as to the likelihood of getting paid on time. Among all other numbers in your entire life, your credit score is one of the most important.

While you might strive never to have to take out a loan in your entire life, there are just some instances when this is inevitable. For instance, you may have to purchase a house through mortgage. Then, there’s your car loan. When your children start going to school, and your financial situation may be a little dire, taking out a loan is also often the best recourse. Hence, there’s a need for a good credit score. That way, you’re more likely to qualify for loans and credit cards with better terms. You can save more money in the long run.

As much as you can strive for a good credit score, there are also instances when your credit score may be getting bad. As one financial responsibility piles up one after the other, your credit score may suffer. This isn’t really a situation you’ll want to be in, but don’t be dismayed as you’re not alone. It’s also not something for you to suffer through forever.

Are you looking for information on how to borrow money if you have poor credit? Here is some useful information on how to borrow money with poor credit as well as additional insights on what you can do to improve your credit score.

A Brief Background On Bad Credit

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Before going thoroughly on how you can still borrow money despite your bad credit, a good starting point is a brief discussion on what bad credit is.

In the finance and banking industry, bad credit means a low credit score or a very short credit history.

You’re considered to have bad credit when you didn’t have ample time to build your credit history. Perhaps you may not have taken on substantive loan amounts yet. Or, it can also be that your financial situations in life have forced you into a late payment history.

Unfortunately, it can be very hard for those of you with bad credit to be considered as a worthy borrower by financial institutions. Hence, there’s a need to double efforts to ensure that financial institutions will still open up their doors to you for credit, even with your bad credit report.

How To Borrow Money

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If you really need that extra cash right now, the good news for you is that you can still successfully get it. Let’s start off with the key points on how you can borrow money, even if you have bad credit.

Get To Know The Best Lending Sources

It’s like searching for a needle in the middle of a haystack when you don’t even know where to begin your search for lending sources. The truth you’ve got to face this early on is that not every lender will be compassionate towards those with bad credit. It’ll only cost you so much time when you’re searching in the wrong places.
So, as a first step, you have to get to know the best lending sources for those like you with bad credit. Here are some of these sources:

1. Loan Aggregators

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Loan aggregators aren’t direct lenders, but there are so many lenders that participate in the platforms of loan aggregators. A good advantage with loan aggregators is that you can be offered a loan, even with very poor credit. All you’ve got to do is to fill out the request, then lenders will make you offers.

2. Personal Loan Lenders

Personal loan lenders are also more flexible and understanding with their requirements. Most of these have no minimum credit score requirement.

3. Peer-To-Peer Lenders

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P2P lenders are a great resource if you’ve got poor credit. However, a possible disadvantage with this kind of loan is that you may be charged with extremely high interest rates – as high as 36%. Balancing out this disadvantage also is the advantage that with P2P lenders, you can take out any kind of loan for any purpose such as purchasing a car, starting out a business, or helping out with emergency expenses.

4. Online Loans

The advent of more advancements in technology has paved the way for lenders to play along in the digital atmosphere. This is a very attractive loan opportunity for those of you who are suffering from poor credit scores.

The attractive point about online lenders is that they don’t have a physical office, so the cost of their maintenance and utilities isn’t high. This means that when they’re in this business, they can be more generous with their offers because of their inherent higher profit margin.

Moreover, online lenders are also characterized as having the ability to move and work fast, with a market geared towards those in need of fast cash. For instance, you can check out small loans from icash.ca when you need fast cash.

Lenders To Take Note Of

Apart from those enumerated above, it’s also beneficial for you to know and understand which lenders you should be careful of. This information can also help you narrow down your potential options of lenders as these ones aren’t exactly the best for your situation of having bad credit.

Be sure never to apply for loans with any of the following lenders:

1. Banks And Credit Unions

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These financial institutions are a no-hope for those of you with poor credit score as these institutions are very driven by credit scores.

However, there are instances when banks can be a little bit more lenient and let you slip through their stringent policies. One is when you’ve got an account with the bank. In this instance, your bank can find more confidence to trust you as a lender simply because you’ve got enough balance in your account to prove your capacity to pay.

2. Payday Loans

While these types of loans are very inviting, they should be avoided at all costs by those with extremely poor credit scores. Apart from the staggering interest at a minimum of 30%, institutions that offer payday loans also need permission to gain automatic access to your account to withdraw funds the next moment your paycheck comes in.

3. Cash Advances

With your bad credit, you may be tempted to take out a cash advance instead. However, this isn’t advised because it’s a very expensive option. Choose this as a last resort only in the face of an emergency.

Borrow From Family Or Friends

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If you’ve got family or friends you can borrow money from, this is also a very good fix for you to temporarily help solve your problem. You may not know it until you’ve reached that point, but you may have friends around you who are more than willing to give you that helping hand in fixing financial difficulty.

With the money you borrow from family or friends, you can use this to pay off whatever loans you have that are left unsettled. In doing so, you can avoid the hefty interest rates that come with loans from formal institutions. Rather than paying installment amounts to credit institutions, you can pay these installment amounts to your friends instead as long as they agree to it.

Prepare The Common Documentary Requirements

When you’re in the process of applying for your loan, it pays also to be aware of the common documentary requirements needed for people with bad credit. After reading through this article, you can slowly start to complete these documents. That way, you can also kick-start your loan application process.

Some of these common documentary requirements are:

  • Your recent pay slip to provide sufficient documentary proof of your income;
  • Written explanation of your current credit problems like if you’ve recently gone through deep financial woes, job loss, or a divorce;
  • Proof of your social security or pension income;
  • Bank account statements;
  • Contact information of your employer.

The key purpose for these documents is for you to prove that all this time, you were previously doing well financially as you had a job. Unfortunately, you underwent extenuating circumstances, so your financial problems arose.

Find A Co-Signer For Your New Loan

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Another smart way for you to get accepted into a new loan is for you to have a co-signer on that loan. This co-signer should be one with a good credit score. You can ride on the positive credentials of this co-signer, so you can be accepted for a loan. Just be sure that you have good relations with this co-signer so that he can help you out easily.

Shop Around For The Best Interest Rates

It’s important that you shop around for the best interest rates possible. Different banks and other credit institutions offer different products. If you immediately go for the very first credit institution you come across, you may be dealing with a high interest rate. If you take the time to look around, you might actually come across other lenders with more generous interest rates.

Understand What A Bad Credit Score Is

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Lastly, but also one of the most important tips for you to remember, is for you to understand what a bad credit score is. That way, you have a clear-cut idea where you stand, right now, credit-wise. You can also avoid falling back into the same trap in the future.

A bad credit score is generally within the following range:

  • 580 to 669, considered as fair credit;
  • 300 to 579, considered as poor credit.

How To Improve Your Credit Score

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Now that you’re aware of the basic steps you can undertake to still qualify for a loan even with bad credit, it’s also compelling enough to take up the things you can do so that you can improve your credit score. The hope is that through reading this, you don’t just take on a temporary relief to your financial problems, but you’re also able to make that permanent change for a better credit score. These tips include:

  • Check your credit report. The first thing that you should do is look at your credit report to see what kind of problem there may be. This is that document that’ll put you face-to-face with the metrics regarding your credit so that you can make permanent changes and corrections in this regard.
    Moreover, double check your credit report for any derogatory information that it may have about your financial standing. Get this resolved immediately so that it doesn’t unnecessarily affect your credit rating.
  • Get a credit card. Even though you may have had a poor credit history, you can improve your credit by getting a credit card. If you have a low limit on your card, it is a good idea to pay your balance in full each month so that it does not get out of control. Paying your credit card bill on time will help to get a better score.
  • Pay off all past dues. Credit card or no, make it a point to pay off all your past dues or balances to all of the loans that you took out. Paying these all on time can give you that leverage, so new creditors can trust you enough again to pay off all your debts on time.


Qualifying for a loan when you have bad credit can seem like a direly impossible task. But, with the right assistance and tips, as you do now from above, it’s actually one that’s doable. From all the key pieces of advice here, the most important one for you to remember is to always make timely monthly payments, no matter what kind of loan it is. Start today, too, in your pursuit of improving your overall credit score. This should be your long-term goal, above anything else.