Does A Bad Credit Score Mean Game Over For Your Finances?

The three-digits of your credit score are the most important numbers when it comes to your finances. This number, which may range between 300 and 850 on the FICO scale, indicates what type of borrower you are to future lenders.

A good score suggests you’re a responsible borrower that pays back what they owe on time, while a lousy score indicates you’ve struggled with these goals in the past.

Past mistakes can spell trouble for you today, but is a low score really all that bad? Before answering this, let’s define what it is and how it may impact your next installment loan online.

What is Bad Credit?

Bad or subprime credit is any credit score that falls between 300 and 669 on the FICO scale. FICO breaks this sweeping range of scores into two categories.

  1. Very Poor: At the bottom of the scale, this rating represents scores between 300 and 579. With a score this low, you will likely face rejection from the biggest mainstream lenders.
  1. Fair: People with fair credit (scores between 580 and 669) may have better luck at getting a personal loan than those with very poor credit, but they can still expect some challenges. They will likely pay more in rates and fees than consumers with prime scores.

Does a Bad Score Make it Impossible to Borrow?

Short answer: no.

For a slightly longer answer, you have to turn away from mainstream banks that keep prime scores in high regard. Instead, look to direct lenders.

Direct lenders of bad credit installment loans may still check your credit when you apply, but it’s not the only determining factor. Direct lender installment loans for bad credit may still be available despite your low score, provided you meet their other requirements.

One such requirement is that you use this online loan for emergencies only. Bad credit installment loans are designed to help you take on surprise auto repairs and unexpected medical expenses when your savings are low.

If you find yourself in the lurch, compare the different installment loans for bad credit available online today. Rate shopping may help you find the best possible loan for your financial profile, even if bad credit installment loans are your only option.

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Work on Becoming a Prime Borrower

Bad credit installment loans are there as a safety net when things go sideways, but in the meantime, your score deserves some attention. By giving it some TLC, you may be able to improve your score and qualify for more affordable loans in the future.

It won’t be a quick fix. Bad history hangs around for roughly seven years, and it may have a greater impact on your score than any good history you manage to pack on during that time. It depends on what’s in your file.

But eventually, bad history has to expire, and your good behavior may take more of the spotlight, provided you don’t add any more bad entries.

Bottom Line

Ideally, you’ll hold off borrowing money until you build up to a prime score, but life may throw a wrench in those plans. If you need help in a pinch before you can improve your score, bad credit installment loans may be an option. Until then, focus on what you can do to add positive entries to your file.