5 Tips To Get A Loan When Your Credit Score Is In The 600 Range
If you are in need of a loan and your credit score is in the 600 range, you may not be sure if you are getting approval. You don’t need to worry. Depending on the exact score, the 600s fall into the fair and good credit range. With both, it is possible to get approved by some lenders.
Even if you are well above the credit score you need for a personal loan, the credit process is still important. You don’t want to choose the wrong lender and be turned down or end up paying a higher interest rate than necessary. Follow these tips to get the loan you want at the best price.
Start your journey to financial success with a bang
Get free access to the select products we use to meet our money goals. These fully vetted tips could be the solution to increasing your credit score, investing more profitably, building an emergency fund, and much more.
1. Find lenders with minimum requirements that you can meet
Each lender has their own minimum creditworthiness for potential borrowers. Some are open to borrowers with a score of 580. Others may require a score of 660, 680, or higher. By choosing a lender with a minimum requirement that you can meet, the more likely you will be approved.
Your FICO® Score is the type of score that matters most. It is the most widely used rating from lenders. So if you want to get your creditworthiness, you should use a method that provides your FICO® Score.
If your credit score is in the 600 range, do your first personal loan search for a fair credit score. The fair credit range in the FICO system is between 580 and 669, so you should find lenders who will work for you. If your score is in the high 600 range, you can even qualify for the best personal loans.
Choosing the Best Ascent Personal Loans
Are you looking for a personal loan but don’t know where to start? Choosing the best Ascent personal loans will help you demystify the offers so that you can choose the best one for your needs.
Take a look at the selection
2. Check that you have been pre-approved
Most lenders offer pre-approval tools online. These allow you to check loan rates without affecting your creditworthiness.
In order to use a pre-approval tool, you will need to provide some basic information. Lenders usually want your name, address, income, loan amount you want, and social security number. When you submit the form, the lender will do a gentle credit check on you. Then you will be told if you have been pre-approved for a loan. In this case, you will be shown the amount and the interest rate that you could receive.
Pre-approval for a personal loan is not a guarantee. But it does give you an idea of which lenders approve and what kind of installments you can get with each one.
3. Find a co-signer
A co-signer is someone who agrees to take responsibility for a loan with you. Because of this, the lender can use the co-signer’s information to decide whether to approve the application and what type of tariff to offer.
Applying for a personal loan with a co-signer with a higher credit rating than you could help you get a bigger loan, a lower interest rate, or both. The challenge is to find someone to do this for you. The co-signer is taking a risk as they are as responsible for the loan as you are. When getting a loan with a co-signer, make sure that you always pay on time to avoid getting your creditworthiness compromised.
4. Pay credit card balances before submitting an application
Improving your credit score before applying for a loan can make a world of difference. Even a small increase could help you get a good interest rate that will save you hundreds of dollars.
A quick way to increase your credit score is to pay off your credit card balance. This is due to a factor known as the credit utilization level, or the ratio of your card balance to your credit limit. Keeping this ratio below 30% is good for healthy credit. So don’t use more than $ 300 per $ 1,000 of credit.
Choosing Ascent for the Best Debt Consolidation Loans
Do you want to pay off debts faster? Check out our shortlist of the best debt consolidation personal loans and cut your monthly payment with a lower interest rate.
Pay off debts faster
The nice thing about loan recovery is that only the current number counts. Let’s say you have a 70% credit utilization. If you cut this down to 25%, your credit score would go up within a month when the credit card companies report your new balances.
5. Watch out for predatory lenders
Unfortunately, there is no shortage of predatory loans out there. Lenders who offer payday loans and auto title loans are two examples. They often charge extremely high interest rates, with lenders in some states requiring APRs in excess of 500%. The reason they can attract consumers is because they have fewer minimum requirements. Some will approve borrowers without checking their creditworthiness.
Check with each lender you are considering to see if they are reputable. Before agreeing to a loan, review the contract, including the repayment terms and the interest rate. If the cost of the loan makes repayment nearly impossible, keep looking for other options.
A credit score of 600 is sufficient to qualify for a loan. Try to balance the balance on all credit cards to keep your credit score as high as possible before applying, or find a signatory to help you. After that, all you have to do is compare your options and get the amount you need at the best possible price.