Bad Credit Score? You Can Still Get A Loan

The options are costly; the best course is avoiding or delaying the loan, if you can

- Kalpana Pandey

Getting a loan sanctioned is an uphill task for most of us in any situation — coupled with a bad credit score, it promises to be a challenging experience. A weak credit score decreases the chances of getting a loan from a bank or a financial institution because it depicts you as a high-risk borrower, someone who has a higher probability of defaulting on repayments, thus turning the loan into a bad investment for the lender. The assessment is purely based on your credit history and past repayment behaviour.

A bad credit score

Bad credit history or poor credit score is typically an outcome of poor management of your credit. It could be due to any or multiples of the following reasons:

• Missed payments or nonpayments on loans and credit cards

• Consistent high use of credit-card limit

• Written-off or settled account

• Too many loan applications within a short time

Poor credit score puts you in the reject list of the lenders, and a loan application is turned down due to the above reason. So, how can you get a loan with a bad credit score?

Don’t lose hope. Poor credit scores don’t necessarily mean that you cannot get loans — they make it harder and expensive. Some of the options which you could use are:

Loan against assets