Multiple factors go into determining your credit score. The three credit bureaus (Experian, Equifax, and TransUnion) collect data about your financial situation and that information is used to calculate your credit score. Factors that are used to come up with your credit score include your payment history, your available credit, how much credit you are currently using, the length of time you have accounts opened, the number of new accounts you have, and more. Other factors can impact your financial situation that the credit bureaus do not consider, such as a job loss, divorce, illness, death in the family, new baby, etc.
There are several reasons why you may find yourself with a low credit score. Moving forward, it can feel like everything is stacked against you as you try to rebuild your life and your credit score. It can feel like there is no way for you to make progress toward your goals or cover unexpected expenses because no one will give personal loans to people with bad credit. Some of the things you think you know about personal loans for bad credit are actually myths that need to be dispelled.
Myth # 1: You Need a High Credit Score to Get a Personal Loan
If you go to a traditional bank to get a personal loan, you need a high credit score. Large financial institutions will not take the time to look at your personal situation to determine if you are a good candidate for a loan. There is, however, another option. You can get a personal loan from a loan center that considers factors other than your credit score. For example, Tio Rico looks at factors such as your employment status to decide if you qualify for a loan.
Myth #2: You Need Collateral to Get a Personal Loan
It is possible to get a personal loan without collateral. This is called an unsecured loan. You do need to have an income to get this type of loan. If you need a small short-term loan, an unsecured loan may be the right option for you.
Myth #3: Personal Loans Have Bad Repayment Terms if You Have a Low Credit Score
Your personal loan repayment terms do not have to be bad simply because you have bad credit. The repayment terms are largely dependent on the place where you choose to take out the loan. For example, Tio Rico Loan Centers offer flexible repayment terms including bi-weekly, semi-monthly, and monthly options.
At Tio Rico, you can get approved for a personal loan even if you have bad credit. The approval process for personal loans at Tio Rico is based on your current situation. You can learn more about the process and get your questions answered by exploring the frequently asked questions.