Best Bad-Credit Loans for January 2021

Personal loans can be used for everything from debt consolidation to major life expenses. 

The best rates and terms will only be available to people with the best credit, especially in a year that’s seen lenders tighten lending standards and requirements across the board. So if your credit score is on the lower end, it’ll be more difficult to qualify for the best rates, if you qualify at all. 

Still, it isn’t impossible to qualify for a personal loan if you don’t have a great credit score.

Many lenders still offer personal loans to people with “fair” or “poor” credit — and some even specialize in offering loans and other financial products to those types of customers. But if you have debt, bad credit, or both, and you’re thinking about a personal loan, you should consider whether or not taking on new debt makes sense. 

You might be better off considering alternatives like credit cards with promotional rates or even a home equity line of credit (HELOC) if you own a home. Consider what it takes to make long-term financial improvements as well, such as rebuilding your credit or starting a debt management plan.

If you think a personal loan is your best option despite having a lower credit score, here’s what you should know:

Best Bad-Credit Loan Rates in January 2021

Institution	Min. Credit Score	Current APR	Loan Term Range	Min. Loan Amt.	Max Loan Amt.
Payoff	640	5.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 24.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	2 to 5 years	$5,000	$40,000
Best Egg	640	5.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 29.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	3 to 5 years	$2,000	$35,000
Upstart	580	8.41{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	3 to 5 years	$1,000	$50,000
Rocket Loans	540	7.161{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 29.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	3 to 5 years	$2,000	$45,000
Prosper	640	7.95{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	3 to 5 years	$2,000	$40,000
Upgrade	620	7.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.97{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	3 to 5 years	$1,000	$50,000
Avant	580	9.95{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	2 to 5 years	$2,000	$35,000
LendingPoint	590	9.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	2 to 5 years	$2,000	$25,000
LendingClub	600	10.68{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.89{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}	3 to 5 years	$1,000	$40,000

How we chose these lenders

This list does not represent the entire market. To rank the personal loan rates you’re most likely considering, we began by analyzing the 16 most commonly reviewed and searched-for personal loans that met NextAdvisor’s standards, as outlined in our Personal Loan Rates Guide. Each lender had to meet the following criteria to appear in this review:

The above rates and loan information is accurate as of Dec. 22, 2020. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

Lender Overview

Avant

Overview: Avant is an online lender that serves customers with fair-to-excellent credit. It’s one of the only two lenders on this list that offers both secured and unsecured loans.

Pros: Avant’s bread-and-butter is unsecured loans, but it also provides secured loans for which you’d use your car as collateral. Avant doesn’t specify a minimum income, and the minimum credit score starts at 580, which FICO considers “fair” credit.

Cons: If you have a “fair” credit score, you won’t be eligible for the lowest APR available; you may get a rate as high as 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} so make sure to always make your monthly payments. You also can’t add a cosigner or co-borrower to your application to improve your chances of approval for a more favorable rate.

Avant
Current APR	9.95{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	2 to 5 years
Loan Amount	$2,000 to $35,000
Prepayment Penalty	None
Origination Fee	Up to 4.75{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Minimum Credit Score	580
Minimum Annual Income	None specified
Co-Borrower Allowed?	No
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	Yes

Best Egg

Overview: The online lender Best Egg offers unsecured personal loans for everything from debt consolidation and home improvement to moving, child care expenses, and adoption.

Pros: Best Egg personal loans can range from $2,000 to $35,000, with repayment terms between three to five years. The minimum credit is 640, and you won’t be penalized if you want to pay off your loan early or make additional off-schedule payments.

Cons: You need a minimum 700 FICO score and a minimum individual annual income of $100,000 to get the lowest APR available. And if you have “fair” credit, you can’t boost your chances of approval through a co-borrower, cosigner, or collateral.

Best Egg
Current APR	5.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 29.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	3 to 5 years
Loan Amount	$2,000 to $35,000
Prepayment Penalty	None
Origination Fee	0.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 5.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}; 4.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for loan terms longer than four years
Minimum Credit Score	640; 700+ for the lowest APR
Minimum Annual Income	$100,000 minimum individual annual income for the lowest APR
Co-Borrower Allowed?	No
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

LendingClub

Overview: LendingClub is a peer-to-peer lender that offers unsecured personal loans through an online marketplace connecting borrowers and investors.

Pros: Personal loans range from $1,000 to $40,000, with repayment periods between three to five years. You can get a joint loan through LendingClub by adding a co-borrower to your application — something not all lenders offer.

Cons: You may have to undergo a more stringent verification process (i.e., providing more documentation to prove income, assets, and debt) due to pullbacks from the COVID-19 recession. If you have excellent credit, you may find better rates elsewhere as the lowest APR is higher than others on the list.

LendingClub
Current APR	10.68{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.89{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	3 to 5 years
Loan Amount	$1,000 to $40,000
Prepayment Penalty	None
Origination Fee	2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Minimum Credit Score	600
Minimum Annual Income	None specified
Co-Borrower Allowed?	Yes
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

LendingPoint

Overview: LendingPoint is an online-only lender that offers unsecured personal loans to borrowers with “fair” credit” and steady income or employment.

Pros: The minimum credit score is 590, and the loans range from $2,000 to $25,000 with repayment terms between two to five years. You won’t have to pay a prepayment penalty if you decide to pay off your personal loan earlier than scheduled.

Cons: LendingPoint would prefer you be at your job for at least 12 months before applying to a loan, though it’s not a requirement. You need to make at least $35,000 per year, and you can’t add a co-borrower, a cosigner, or collateral to your loan to improve your chances of approval.

LendingPoint
Current APR	9.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	2 to 5 years
Loan Amount	$2,000 to $25,000
Prepayment Penalty	None
Origination Fee	0{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, depending on your state
Minimum Credit Score	590
Minimum Annual Income	$35,000
Co-Borrower Allowed?	No
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

Payoff

Overview: Payoff is an online lender that works only with borrowers who want to consolidate high-interest credit balances.

Pros: The APR range is lower than many of its competitors, you don’t get charged late fees if you’re accidentally late making a payment, and you can receive free FICO score updates. 

Cons: To qualify for a Payoff loan, you need at least three years of established credit and a 640+ credit score. You also wouldn’t qualify if you live in Massachusetts, Mississippi, Nebraska, or Nevada, or want to take out a personal loan for anything other than debt consolidation. 

Payoff
Current APR	5.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 24.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	2 to 5 years
Loan Amount	$5,000 to $40,000
Prepayment Penalty	None
Origination Fee	0{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, included in APR
Minimum Credit Score	640, and three years of established credit
Minimum Annual Income	None specified
Co-Borrower Allowed?	No
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

Prosper

Overview: Prosper, a peer-to-peer lender, lends to borrowers with fair-to-excellent credit scores who want to consolidate debt and take on home improvement projects.

Pros: Co-borrowers and cosigners are allowed and might help boost your chances of getting approved for a personal loan with a better rate. Prosper’s loans range from $2,000 to $40,000 with repayment terms of three or five years.

Cons: If you don’t have solid credit, you may be stuck with an interest rate at the high end of the spectrum (35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} APR). Prosper also doesn’t offer secured loans.

Prosper
Current APR	7.95{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	3 to 5 years
Loan Amount	$2,000 to $40,000
Prepayment Penalty	None
Origination Fee	2.41{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Minimum Credit Score	640
Minimum Annual Income	None specified
Co-Borrower Allowed?	Yes
Cosigner Allowed?	Yes
Unsecured Personal Loans	Yes
Secured Personal Loans	No

Rocket Loans

Overview: Rocket Loans, a subsidiary of Quicken Loans, is a personal loan lender that serves borrowers looking to consolidate debt or finance home improvement projects or auto expenses.

Pros: Rocket offers the lowest minimum credit score (540) of any lenders we reviewed, so you may qualify for a personal loan with a “poor” credit score. You can also get instant decisions and same-day funding through Rocket.

Cons: You can’t boost your approval odds by applying with a co-borrower or cosigner, or by using an asset as collateral for a secured loan (Rocket doesn’t offer secured loans).

Rocket Loans
Current APR	7.161{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 29.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} with AutoPay (0.3{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} higher if invoiced)
Loan Term Range	3 to 5 years
Loan Amount	$2,000 to $45,000
Prepayment Penalty	None
Origination Fee	1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Minimum Credit Score	540
Minimum Annual Income	$24,000
Co-Borrower Allowed?	No
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

Upgrade

Overview: Upgrade, an online-only lender, offers personal loans for debt consolidation and financing home improvement projects and major purchases.

Pros: Personal loans with Upgrade range from $1,000 to $50,000, with repayment terms between three to five years. You can apply for a joint loan if you want to better your chances of getting approved for a low rate.

Cons: If you have “fair” credit, you may end up with an APR as high as 35.97{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and an origination fee as high as 8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. People who live in Hawaii and Washington, D.C., aren’t eligible for Upgrade personal loans.

Upgrade
Current APR	7.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.97{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	3 to 5 years
Loan Amount	$1,000 to $50,000
Prepayment Penalty	None
Origination Fee	2.9{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Minimum Credit Score	620
Minimum Annual Income	None specified
Co-Borrower Allowed?	Yes
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

Upstart

Overview: Upstart is an online lender that uses AI technology to evaluate and approve borrowers with non-traditional financial backgrounds, which includes those who may not have strong credit scores but are considered creditworthy in other respects (e.g., having a steady income and employment history).

Pros: Upstart’s AI technology factors employment and education history into your application, so if you have a limited credit history or are self-employed, your odds of getting a personal loan may be higher with Upstart than other lenders. The minimum credit score is 580 (considered “fair”), and you may receive funds as soon as the day after approval.

Cons: Even if you get approved for a personal loan with a “fair” credit score, you may be paying a very high APR. And if you live in Iowa or West Virginia, you won’t be eligible for an Upstart personal loan.

Upstart
Current APR	8.41{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} to 35.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Loan Term Range	3 to 5 years
Loan Amount	$1,000 to $50,000
Prepayment Penalty	None
Origination Fee	None
Minimum Credit Score	580
Minimum Annual Income	None specified
Co-Borrower Allowed?	Yes
Cosigner Allowed?	No
Unsecured Personal Loans	Yes
Secured Personal Loans	No

What Are Bad-Credit Loans?

Bad-credit loans are for borrowers with low credit scores or a limited credit history. Oftentimes, people end up with low credit scores because of missed payments, bankruptcies, or heavy debt loads — or because they haven’t had enough time yet to establish a credit history. Personal loans are more difficult to get when you have bad credit. But many lenders do offer them — and some even specialize in bad-credit borrowing. 

What is a bad credit score?

Each credit scoring agency defines a bad credit score differently. But for our purposes, we’ll refer to FICO credit scores here. FICO scores are between 300 and 850; the better your credit, the higher your score.

A bad credit score falls within FICO’s “fair” or “poor” credit tiers:

• Fair credit: 580 to 669
• Poor credit: 300 to 579

What makes a bad credit score?

There are five factors that make up your FICO score. The percentages reflect how important each of them are:

• Payment history (35{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb})
• Amounts owed (30{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb})
• Length of credit history (15{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb})
• New credit (10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb})
• Credit mix (10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb})

If your credit score is low, it’s likely because you haven’t consistently made payments or because you have substantial debt from multiple loans. Your credit score can also get dinged if you have a short credit history, if you have only had access to one type of loan or credit, and if you have recently gotten a new credit card or loan.

How to Get a Bad-Credit Loan

The process of getting a personal loan with bad credit may be more difficult than if you had excellent credit — but you can find one that’s flexible or affordable. You’ll just have to do a little more digging and consider how a loan payment may fit into your budget.

1. Figure out what your needs are

First, consider why you need a personal loan. Are you looking to consolidate credit card debt? Fund a wedding or vacation? Taking out a loan is a big responsibility and can damage your financial health if you’re not careful. We recommend taking out a loan only if it’s going to improve your financial health. Otherwise, you could be sinking yourself into unnecessary debt with unfavorable terms.

2. Shop around

Find out what banks, credit unions, and online lenders offer personal loans for people with “fair” or “poor” credit. With the COVID-19 pandemic, many lenders have tightened their qualification standards and limited lending to people with good-to-excellent credit, but there are still options out there for you. Just make sure the interest rates and fees aren’t too high and that the lender is reputable.

3. Get prequalified

Many lenders offer the option to apply for pre-qualfication, where you can enter a limited amount of information about yourself on the website and see what type of APR and loan terms you’d potentially qualify for. It’s not an official offer, but it does give you a sense of your eligibility for the loan without the lender running a hard credit inquiry on you. A hard credit check (one or multiple) can lead to a temporary decrease in your credit score.

4. Apply

Qualifications and required information will differ between lenders, but you’ll likely need to provide the following details:

• Permanent address
• Social Security number
• Employment history
• Source(s) of income
• Existing debts and assets
• Purpose of the loan
• Co-borrower or cosigner information

Lenders will also run a hard credit check to understand what your credit score and debt-to-income ratio are. 

5. Gather documentation, once approved

If you’re approved for a personal loan, the lender will need to verify the information you provided during the application process. So it’s helpful to keep the following documents on hand:

• Driver’s license or other type of photo ID
• Proof of Social Security number
• Tax returns
• Paystubs
• W-2 forms
• If paying off debt: account numbers and balances of loans, credit cards, or other debt

6. Withdraw funds 

Once the lender has verified your documentation, you’re ready to receive the loan amount — if you’re approved. Lenders will either mail you the check, direct deposit the cash, or send a wire transfer. And it can take anywhere from one day to a week to receive it. To mitigate any potential problems in the future, we recommend setting up autopay with your lender so you never miss a bill payment.

How to Avoid Scams

Scams are abundant in the world of bad-credit lending. Many predatory lenders will entice people with promises of quick cash, only to charge extremely high fees and interest rates. As a result, those who have low income or low credit scores can find themselves in a cycle of debt. Here are some ways you can avoid getting scammed by a predatory lender.

1. Avoid lenders that don’t ask for your credit

Even if they’re accepting of bad credit, a reputable lender should still ask for your credit history and sources of income. It’s a bad sign if a lender seems like it would accept anyone; it could mean its more interested in extracting fees from people than lending responsibly.

2. Check if the business is licensed and has good reviews

Any lender you work with should be licensed by the Federal Trade Commission in your state. You can find out this information through your state regulator or attorney general. We also recommend checking the lender’s letter-grade with the Better Business Bureau (BBB), which rates companies based on consumer complaints. If a prospective lender has been sued by a state attorney general, for example, you’ll be able to see those details on its BBB page.

3. Don’t pay cash upfront

It’s normal for origination, application, or appraisal fees to come out of the loan amount. But if a lender is charging you cash upfront, that is a major red flag.

4. Ignore the hard sell

Reputable lenders typically aren’t advertising to you over the phone or at your front door. If an ad or sales pitch seems like a scam, it probably is. Similarly, you shouldn’t work with any lender that tries to pressure you into applying or signing a contract.

5. Look for signs the lender is real

Your lender should have a robust and secure website (starting with “https” in the url in your browser and a padlock symbol), as well as a physical address. Online lenders may not have physical storefronts you can walk into, but they should still have an address that signifies an office staffed by employees.

Types of Bad Credit Loans

1. Secured and unsecured personal loans

Personal loans are either secured or unsecured. To get a secured loan, you need to put up an asset (such as your home or vehicle) as collateral for the loan. When you do this, the bank gets extra reassurance about your application and is more likely to approve you or give you a lower APR — but the risk is you could lose that asset if you fall behind on payments. Unsecured loans don’t require collateral and may come with higher interest rates and lower loan amounts, but they’re less risky for you as the borrower.

2. Payday loans

Payday loans are short-term, high-cost loans — often for $500 or less. You can get these loans quickly, but the fees and interest rates are exorbitantly high. Payday loans frequently land people in cycles of debt due to often-predatory lending terms. We recommend avoiding payday loans at all costs.

3. Cash advances

Cash advances are short-term cash loans borrowed from the available balance on your credit card. They can be an easy method for fast cash, but the interest rates are often much higher than a credit card’s standard purchase APR or a personal loan APR.

4. Bank agreements

Bank agreements are small loans given out by banks who have existing relationships with customers. If you’re in a bind, your bank may be able to loan you some cash — but keep in mind these policies are not official and the terms and requirements will differ depending on the lender and the applicant’s financial profile.

5. Home equity loans for bad credit

Home equity loans are fixed-term, fixed-rate loans taken out from the value of your home. These loans are secured by your home equity and may be available to you as a homeowner, even if you have “fair” or “poor” credit. But know that you are taking on additional risk — if you fall behind on payments, your home could go into foreclosure.

6. HELOCs for bad credit

Similar to home equity loans, a home equity line of credit (HELOC) is secured by the value of your home. But with HELOCs,  you’re borrowing from a revolving credit line (not unlike a credit card) and can withdraw cash any time you want within the draw period of the line of credit. After the draw period, you’ll enter a repayment period in which you cannot withdraw more cash and must pay back what was borrowed in a certain amount of time. Because of the COVID-19 pandemic, HELOCs have become extremely difficult to get for anyone with less than “good” credit.

7. Student loans for bad credit

Student loans are available to borrowers with “fair” or “poor” credit who are looking to pay for tuition, student living expenses, textbooks, and other learning essentials. You likely won’t be able to take out a personal loan for student expenses, so instead, you’ll need to shop around among specialized student loan lenders.

How to Improve Your Credit

If you want to increase your credit score to better your chances of getting a loan, here are some ways to do it:

Pay your bills on time every month

Payment history accounts for as much as 35{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of your FICO credit score. By reliably paying your bills over time, you can reap the benefits of an improved credit score. Just keep in mind this takes time — change doesn’t happen overnight.

Check your credit reports for errors

You may have a low credit score for reasons beyond your control. Check your credit reports from the three major credit reporting agencies — Equifax, Experian, and TransUnion — for any errors or discrepancies. Through April 2021, the three agencies are offering free weekly credit reports through AnnualCreditReport.com since many are still facing financial instability due to the COVID-19 pandemic. 

Don’t close your credit cards, even if you’ve paid them off

After you’ve finished paying off a credit card, you may want nothing more than to close it and never think about it again. But not so fast — the length of your credit history accounts for 15{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of your FICO credit score. Even if you don’t intend on using that card regularly, it’s best to keep it open to show credit agencies that you can be trusted to not use all of the credit available to you.

Avoid opening too many credit cards at once

On the flipside, you don’t want to open so many credit cards. The FICO credit scoring model dings your score if you open — or even apply for — too many credit cards and loans at once. New credit accounts for 10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of your credit score, so make sure you’re being judicious about pushing the “Apply” button.