The best way to get a personal loan with a 500 credit score is to find a lender that caters to borrowers with lower credit scores. There are a number of different types of “bad credit loans” out there. The hard part is knowing which ones are safe, and which ones are right for your specific financial situation.
A 500 credit score is considered to be “poor credit” according to the FICO credit scoring system. This means that lenders may view you as a risky investment when it comes to lending you money. Your credit score is the three-digit number that represents how trustworthy and financially reliable you are. Having a low credit score means that you have exhibited poor financial habits in the past. Luckily, it doesn’t have to stay like this.
Improving your credit score will help you to qualify for better personal loans, new forms of credit, and more favorable interest rates. Even if you have a poor credit score right now, through hard work and dedication you can improve it and come out the other side as a better borrower. Below is a list of a few steps you can take to start improving your credit score today:
Always make payments on time. Whether it’s your monthly utility bills, loan payments, credit cards, or any other payment, make it on time. This is by far the most important part of your credit score. Never miss payments, never pay late.
Lower your overall credit card usage. How much you use your credit card also plays into your credit score. Using too much credit tells lenders you may not be very financially responsible.
Pay off your outstanding balances as soon as possible. Having too many outstanding loans and credit card balances will lower your overall credit score. Try putting some of your disposable monthly income toward these debts to pay them off sooner.
Start with these tips, stick to them, and eventually you’ll start to see your credit score improving. It may take a little while, and it isn’t easy, but it will be worth it in the long run.