Can I Borrow Money Even With a Low Credit Score?

Published on Oct 02, 2014 08:06 am

Credit scores can affect your ability to borrow money. Typically, the higher your score the easier it is to borrow; the lower your score, the harder it is to borrow. However, having a low credit score doesn’t mean that you can’t take out loans or get new credit cards. You might be required to pay higher interest, but options do exist.

Student Loans
Depending on the type of student loan you’re looking to take out, your credit score may not matter. According to the U.S. Department of Education, you don’t usually need to get your credit checked to get a federal student loan, other than a Parent Loan for Undergraduate Students loan – usually called a PLUS loan. If you take out a private student loan, though, the private lender may check your credit score and other factors when making their lending decision and when selecting an interest rate to charge you.

Car Loans
While TV commercials often focus on super-low promotional interest rates for buyers with Tier 1 credit, having a low credit score doesn’t mean that you won’t be able to secure a car loan. Lenders that focus on the sub-prime market offer loans to people with low credit scores, although they may have higher interest rates than traditional car loans. Using a co-signer may be another option to purchase a car, since the lender considers the co-signer’s credit as well as yours. This can possibly qualify you for an alternative loan.

Credit Cards
A low credit score doesn’t have to keep you from having a credit card. Some lenders offer credit cards to borrowers without stellar credit. Another option is to take out a secured card. A secured card works similarly to a credit card but with one difference: it requires a cash collateral deposit which then becomes the credit line for that account. Some secured cards also report to the credit agencies and that information can become a part of your credit score.

You don’t always need perfect credit to get a mortgage, either. Some mortgage lenders offer programs that allow you to take out a loan even if your score is relatively low. You might also be able to take advantage of nontraditional financing or opportunities to buy a house and have the owner finance it for you while you work on your creditworthiness. While there are options to securing a line of credit with a less-than-perfect credit score, there are also risks you should be aware of.

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About the AuthorSteve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. Lander holds a Bachelor of Arts in political science from Columbia University.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

Published by permission from, Inc., an Experian company.   © 2014, Inc.  All rights reserved.

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