Can I Get an Installment Loan in Texas If I have 500 Credit Score?
It is a common knowledge that a poor credit score in Texas makes it difficult to qualify for an installment loan. Is there any chance with a 500 credit score? Well, it is always possible if you try the strategies outlined below.
1. Rebuilding Your Credit Score
A credit score of 500 puts you only 80 points away from a “fair” score. It is important to take some time improving your score. It will still be way below the average and you are likely to pay higher interest rates. However, your chances of approval will be higher, giving you access to a wider range of lenders. Start today if you wish to rebuild your credit score.
One key thing you would want to understand is how your credit score is calculated. Did you know that you can use a secured credit card to raise your score? It is an accessible form of credit you can use to improve your score. It is worth checking your credit reports for errors that could be hurting your score besides ensuring you make every payment on time.
You can also team up with a non-profit credit counseling service. These companies provide personalized advice on your financial situation to enable you towork on rebuilding your score. Besides, they can also cooperate with your creditors and negotiate in your place to lower interest rates or get better terms on your debts where possible.
2. Getting Quotes From Bad Credit Lenders
A low score can result from a short credit history. Consequently, a low score with a clean history can give you an upper hand over someone with a higher score but has a record of delinquencies. With a bad credit, your loan applications should be centered on many lenders that use a soft pull. This ensures you do not hurt your score.
Are you impatient to rebuild your credit score?You can rely on lenders that give finance for bad credit. Your low score is unlikely to hinder you from qualifying for these installment loans. Applying for apre-approval to discover if you qualify for these loans is just enough without undergoing a hard credit check or filling out an application.
3. Asking Friends or Family Members for a Loan
It is obvious that obtaining a personal loan from an individual has never involved a credit check. Scores of 500 and below,therefore, will not hinder you from striking a deal. You can get some cash from a friend or family member who has it. It is all important to agree on the terms before borrowing and ensure you repay the loan as pre-agreed in order to maintain your perfect relationship.
4. Enlisting a Consigner
A consigner is a third party who will be responsible to repay your loan should you default on it.You can try getting a personal loan by using someone else’s good credit card with a third party. This is practical if you cannot rely on your own credit score to get an installmentloan. Find a lender that accepts consigners forloans.
You will need to request an individual with a good credit to act as your co-applicant. Their good history should help offset your poor credit score and increase your chances of approval. The lender can reject consigners for whatever reason. At this point, you can consider spousal income.
5. Asking the Lender to Reconsider
If your loan application gets rejected, you can always follow-up and ask the lender to reconsider. Ensure you have some good reasons why your loan should be approved despite having a bad credit. It is essential to explain to the lender why you are a “safe bet.”
Forinstance, you might have received a high income, enabling you to settle your new debts easily or you have a good explanation for your past underperformance.A thin credit file could require a proof of positive payment history towards other bills such as rent.
This is a long method but it can be successful. Your chances of success heavily depend on your proof of financial stability and security. A credit union is another viable option because they are more flexible in their underwriting.
6. Getting a Secured Loan
A credit score of below 500 makes it difficult to get an unsecured personalloan. However, you can borrow against an asset to obtain a secured loan. These include a car with a car equity loan, retirement account with a 401k or IRA loan, home equity with a HELOC or savings with a savings-secured personal loan. You can consult your bank on these types of loans. Credit unions too, commonly offer savings-secured loans to enable you torebuild credit.
7. Watching For Predatory Loans
You may be in real need of cash but do not sign for predatory loans without a thorough check. These loans include car title loans, paydayloans, andadvance-fee loans and are one of the most expensive ways to borrow.
With payday loans, you have to write a check to the company for the sum you wish to borrow plus a set fee. The check is held until the loan becomes due which is typically your next payday. If you are unable to repay when the loan balance becomes overdue, you can extend the term of the loan, accruing more fees in the process.
Titleloans, on the other hand, require you to submit your car’s title to the title loan company in exchange for asum, equivalent to the value of your car. You can choose to roll the loan over to the next month if you are unable to pay on time, getting hit with more fees in the process. You risk having your car repossessed by the lender if you are unable to repay the loan at all.
Going for these loans will leave you with high additional costs that can only worsen your situation in addition to hurting your score. It is advisable to take your time and research for the best options otherwise you risk borrowing money you cannot afford.
A poor credit score comes with several limitations. However, trying some of these strategies can be enough to help you enjoy the readily available installment loans in the same way individuals with high credit scores do. It is still necessary to improve your score above the average mark nonetheless.
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