Bad credit personal loans can be pretty painful.  You’ll pay  a high interest rate, with high fees if you are late or default. You may have to pay a prepayment penalty, which means if you pay off the loan early, you still have to pay the bank a chunk of the interest in addition to the principal balance.  And, you might have trouble without offering some kind of collateral, since an unsecured loan puts the bank in a very precarious position.  Still, there are ways to borrow money even with bad credit.  

Try to decide beforehand what you want the loan for, so you don’t just spend it all without knowing where the cash went.  If you don’t really need the cash for a specific reason, you might hold off until you have rebuilt your credit and can get better interest rates and terms from a bank.  Using the loan for debt consolidation is always a good reason, but only if you then close the credit cards or other debts that the loan pays off – instead of just adding more to your debt burden!  

Before you start applying for loans, find the best lender with the most favorable terms.  At the bottom of this page we have a list of lenders who offer a wide variety of loan programs to choose from, regardless of your credit.  You’ll want to look at the fine print too.  Ask about these fees and charges:

- Are you paying an up front application fee or processing fee?  Is there a fee to pull your credit?

- What is the interest rate?  What is the APR (annual percentage rate)?  Are they significantly different?  

- Do you have to provide collateral for this loan, or is it unsecured?  (How bad your credit is may determine whether the lender needs security or not.)

- How long until I have a decision? How long until you disburse the loan funds?

- If you turn me down, do you  have a related company that can do the loan?

Don’t just look at the monthly payment, because many hidden fees and charges can be included.  Make sure you compare all loan products before you apply with any particular lender – each time you apply for a loan, you will impact your credit score, so keep it to a minimum!

If you get turned down for unsecured credit, you might want to take a month or two and take steps to improve your credit.  You can take steps that show results within just couple months.

These so-called credit repair services claim to “fix bad credit” – their ads are on the television, radio, and online too.  They all make similar claims:  that they can cancel judgments, bankruptcies, delinquent payments and other bad credit items, for a fee of course.  Some even claim to get you a completely new, clean credit report.   

Beware when you hear these claims – much if not all of what these credit repair service companies are offering is illegal!  They collect fees, and in the end, your credit is no better off than before.  

You can actually take real, immediate steps to repair bad credit without using a bad credit repair service.  But if you are in way over your head, there are also legitimate credit counseling services which can help you.  We suggest a few below.  BE SURE TO AVOID ANY COMPANIES THAT ASK YOU TO DO THE FOLLOWING, OR THAT OFFER TO DO THESE THINGS FOR YOU:

- They tell you that you should file a dispute or verification for every item on your credit report – even if you know it is a legitimate debt.  They’re hoping that a creditor won’t follow up, and that you can get the debt removed by going to court.  After hours, day or weeks of your time in court, writing letters, and more, you will find that the creditor will win out and your debt affirmed.  You’d be better off spending the time earning additional money to pay off your legitimate debts. 

- They may tell you that you can obtain a brand new credit file using and Tax Identification Number (TIN)  A TIN is used by a small business to track information for a small business.  Your personal information is still tagged to the TIN, and trying to use a TIN to avoid your personal credit liabilities is illegal.  Your creditors will eventually figure it out, and the credit reporting agencies will show your personal debt on the TIN’s credit report! 

- Some firms might suggest that you refuse to pay debt, based on religions reasons (usury) or a supposed Federal law that makes credit illegal.  If you subscribe to the same crazy theories that say paying taxes is illegal, and stop paying your income tax, then this might be for you – but understand that this too is illegal! 

The only legitimate way to take on bad credit repair is to set up a good debt payment plan, and follow it.  If you have too much debt and need to have some forgiven or declare bankruptcy, there re legitimate ways to do that.  Just be patient, stick to your plan, and you will start to see results within only a few months – and you can get out of debt in fewer years than you think.  Follow our Steps Plan by clicking on the button to the left, or click here to receive our FREE Steps To Fix Bad Credit report via email.  

Instead of falling for a quick fix, read everything on this site and see if you can’t get started on your own.  Below we recommend several agencies and companies who will work with you to put together a repayment plan and get the creditors off your back.  

Remember however:  Working with a credit counseling agency will also go on your credit report.  And some of the credit counseling agencies below are funding by the major credit card companies – which means they will recommend against bankruptcy in favor of paying all of your debts, and will not necessarily work in your secured debts into your plan – your car or home.  Be sure to discuss those topics with your counselor, and don’t hesitate to interview them first to make sure you have a good working relationship with the person you’re assigned – you may be working with this person for some time!

Can it be true?

For people with bad credit, finding an easy way to get out from under a heavy debt burden is very tempting.  But the sad fact is that the “fast” credit repair offers are usually just scams – designed to take your money and result in no better credit than before.

Some of the most common tactics are:

1. Claiming to “wipe your credit report clean”.  This usually involves getting an employer ID, which the debtor then uses as their new social security number when applying for credit.  This is completely illegal and fraudulent.  It’s easily discovered by creditors, who have access to prior addresses, employment, and other information – and are not just looking at a social security number. 

2.  Claiming to get you immediate credit no matter how bad your credit score is.  This too often involves getting a business line of credit based on an employer ID and not your personal social security number.  The terms of these loans can be outrageous, if you even successfully qualify – many creditors still want you to see your personal credit!

3.  Reducing the amount of your debt by 20, 30, 50% or more.  The companies that agree to help you cut down your debt will often charge a huge fee for this service.  Despite this, a debtor can often just do the same thing themselves – for free! – by contacting credit card companies themselves.  These companies will negotiate with your lenders and credit card companies on your behalf, but you can say the same things when you contact your creditors.  Also – while you might have lowered your debt, but the amount you’re not paying will show up as a “charge off” – meaning the bank didn’t collect it. This is a big a black mark on your credit report as any. 

Be careful when applying for “fast” credit repair programs.

Your business credit report contains all of the information that is needed to determine if you are a good candidate to do business with, or if you are a risk. An individual or company can look at your business credit report and determine if you are on time with loan and credit card payments, if there are any public judgments against you and how long you have been established. That same person or business will use that to determine if THEY want to do business with YOU.

For example, say you are a small hometown construction company and you need supplies. You decide to go to the local hardware store and open an account, not only for the convenience but also so you aren’t worrying about how to pay for the supplies. The first thing that hardware store is going to do is to pull your business credit report.  Could you get an account with them if you have a bad business credit report? Not likely.

Another example with the same small hometown construction company would be this; you have been recommended to someone by a past customer, but this new customer knows nothing of you.  Given your permission, they pull a business credit report on you and it shows that you several judgments against you for sloppy work. Would you get their business?  Not if they are smart.

Your business credit report is a very important part of your company and how you do your business.  Make sure that you keep all of your accounts paid up and on time and that you do quality work for whomever your customers may be to ensure that your business credit report reflects who you really are.