If you look at your credit report and see that your score falls between 580 and 669, you have bad credit.
In the United States, fewer things make your life harder (and more expensive) than bad credit. Some lenders will turn your loan applications outright. Others will accept, but charge you a sky-high interest rate. Let’s not even get started on rental housing.
Bad credit isn’t a life sentence, though. It’s still possible to secure loans with good terms and conditions.
In this article, our focus is on long-term loans for bad credit. Continue reading to learn how you access these loans even when your credit is in the red zone.
Table of Contents
Know Your Credit
A whopping 40 percent of credit-active consumers in the United States don’t know their credit score.
If you’re one of these people, you aren’t doing yourself any favors, especially if you want to secure a loan, let alone a long-term loan. Knowing your credit score does more than inform you where your credit stands.
You see, not all bad credit is the same. A person who has a credit score of 669 isn’t really the same as a person whose score is 580, even though they both have bad credit.
Even when lenders are offering bad credit loans, they usually have minimum credit score requirements. This effectively means a person with a bad credit score of above 600 could get approved for a loan while a person with a bad credit score of 599 or below gets denied the same loan.
Plus, knowing your credit enables you to determine whether it’s better to try and raise your score before you apply for a loan. For example, if your score is 669, you’re on the brink of good credit. It’s possible that a small thing, such as paying off one credit card, can be all you need to jump from bad credit to good credit.
Identify Lenders of Long-Term Loans for Bad Credit
Here’s an open secret: you aren’t going to take out a long-term loan from your local bank if you have bad credit.
If banks don’t offer these loans, who does? This is why it’s important to identify potential lenders before you make an application.
These loans are typically offered by online lending companies. There are lots of them, so be sure to research and find one that suits your need. If you feel like you need deeper information about these loans and their lenders, know more here.
A Strong Income Is a Strong Substitute for Credit
Lenders look at two key factors when making a lending decision: credit and income.
Income carries a lot of weight. If you’ve bad credit but your income is solid, you’ll certainly get approved for a loan. But if you have good credit and no income, good luck getting a loan.
As such, if you have bad credit and you want a long-term loan, it’ll help a great deal if your income is solid. Take up another job if you have to.
You Can Get Long-Term Loans with Bad Credit
Ordinarily, it takes good credit to secure long-term loans like car loans and mortgages. Bad credit hurts your chances, yes, but it doesn’t make it impossible to get these loans. With this guide on long-term loans for bad credit, you now know what you can do to improve your chances of getting approved.
Keep reading our blog for more tips and insights.
