Poor Credit Doesn’t Have To Ruin Your Life

CreditSoup Staff

Updated On: April 1, 2022  •  3 Minute Read

Financial Tips

Having a bad credit score sucks. There’s no gentler way to put it. Still, poor credit doesn’t mean that your financial life is over. If you’re committed to building the discipline not to spend more money than you have, you might find your options pretty light in comparison.

Get a Bad Credit or Emergency Loan

The term “Bad Credit Loan” sounds ominous, but it’s really just naked truth — if your credit score falls below 600, this is what you need. Expect to pay more in interest, but the following options could make the loan a little more affordable:

• Find a co-signer
• Use your home equity
• Take advantage of your credit union
• Look for peer-to-peer loans

If you’re truly desperate, before you go to your local payroll or title loan store, try requesting an in-person interview with your bank. Show up prepared with documents that prove any kind of financial stability, like paycheck stubs or tax returns. If you’ve been making regular payments on credit cards or other loans, but they haven’t positively impacted your FICO score yet, make sure you give your bank that information as well.

Buying or Refinancing a Home

There are now more options than ever before to find a mortgage outside of your traditional bank:

1. Department of Veterans Affairs Loan

Active or retired members of the military, reserve or National Guard are eligible for a home loan of $36,000 or more with no early payment fees or mortgage insurance. Additionally, your house appraisal may qualify for no down payment.

2. Federal Housing Administration Loan

If your home qualifies, and with a credit score of at least 580, you could be eligible for a loan backed by the FHA. With the reduced risk to the lender, the typical 20% down payment can drop to as little as 3.5%.

3. Online Lending Networks

Online networks like CreditSoup are a platform to find the best lenders for you. The open market environment bodes well for competitive terms and lower eligibility standards.

Rebuild Poor Credit With Conscientious Credit

Now, this is where the discipline comes into play. To rebuild credit, using a credit card is one of the best options you have. Make sure you can pay your balance in full every month to stay out of trouble.

Authorized User on Account

Ask family members or friends if they will add you as an authorized user on their credit card account. The mere association with their outstanding credit history can ratchet up your score. Keep in mind that if you misuse the privilege, you’ll likely damage your relationship as well as your credit score.

Secured Credit Card

A secured credit card is a fantastic way to improve your credit score and easy to open as there is virtually no risk for the lender. You make a deposit to your account, and that amount becomes your credit line. As you repay your purchases (with interest, when applicable), the credit is available for you to use again.

Credit Strong

Credit Strong is a financial hybrid specially designed to help you build or improve your credit. When you open the account, Credit Strong issues a loan to a locked account. Every month, you make a payment of principal plus interest, and once you pay the loan in full, you will have full access to the account. Each payment is reported to the credit bureaus, thus building your history.

When it comes to getting your financial life back together, the worst thing you can do is wait. Check out CreditSoup’s options for more ways to rewrite your credit history today.