How to Get a Personal Loan With a 550 FICO Credit Score

By Valencia Higuera

  • Overview

    Do you need cash for a home improvement, car repair or other emergency expense? If so, consider getting a personal loan. Banks and credit unions offer these loans. However, qualifying for a personal loan generally requires an excellent credit history. Even so, there are ways to obtain financing with a 550 credit score, which can benefit persons who don't have a credit card, and those without a cash savings.
    How to Get a Personal Loan With a 550 FICO Credit Score
    • Step 1

      Maintain steady employment. Banks and credit unions have strict loan guidelines; and to qualify for a personal loan with a 550 credit score, you'll need to have steady employment. Steady employment includes maintaining the same employer for at least 90 days. Moreover, you'll have to show proof of employment. Financial institutions request copies of paycheck stubs or banking statements.
    • Step 2

      Find a co-signer. It's difficult to obtain a loan with a 550 credit score. Your credit score says a lot about you, and people with a low credit score generally have a bad payment history. Apply for the personal loan with a co-signer and improve your chances of qualifying for funds. Choose a co-signer with an excellent credit history. Co-signers become responsible for the debt if you default, and the loan will appear on their credit report. Make sure your co-signer fully understands the arrangement.

    • Step 3

      Use collateral. Collateral or security for the personal loan can include any valuable piece of personal property such as a vehicle title, electronics, jewelry or boat title. Since collateral secures the personal loan, it's easier to obtain financing with a low credit score. In the event of default, lenders can claim and sell your property, and use the proceeds to pay off the loan.
    • Step 4

      Compare loan rates. Whether you have good credit or bad credit, you'll need to shop around and compare different loans. This maneuver ensures the best rate and terms on the loan. Contact several banks or credit unions and obtain a no-obligation quote. To speed the process, use a loan broker. You'll submit one application, and the broker works on your behalf to find suitable loans.
    • Step 5

      Keep the loan balance small. If obtaining a personal loan with a 550 credit score, anticipate a high interest rate. A high rate increases monthly payments; and if you want to keep the loan affordable, borrow only what you need.
    • Skill: Moderately Challenging
    • Ingredients:
    • Employment
    • Co-signer
    • Collateral

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