Can I get a personal loan if I have bad credit?

While bad credit is never in your favor, it doesn’t necessarily mean you don’t qualify for a personal loan.

Let’s start with a few key questions:

what is a credit history?

Essentially, your credit history (rating or score) is a number between 0 and 1000 (or sometimes 1200, depending on the credit report).

This number is a score based on personal and financial information in your credit report, including whether you’ve ever filed for bankruptcy, been denied a credit card or loan, or paid your bills out of date. time.

When applying for a loan or credit card, the lender will check your credit score to determine the reliability of your borrower based on your rating. So, having bad credit can be a red flag for lenders.

What type of personal loan can I qualify for if I have bad credit?

It can be harder to qualify for a personal loan if you have a bad credit history than an applicant with stellar credit.

You might also be offered a significantly higher interest rate and fees than someone with good credit.

It’s also important to keep in mind that lenders may require more intense application processes and financial verification procedures for applicants with poor credit. This is to ensure that you can manage loan repayments. In addition, lenders can ask for Security on the loan.

What about payday loans?

Some types of online loans may not require a credit check and offer instant money transfers, called payday loans. Mozo does not approve of these types of loans as they are potentially very risky due to their high interest rates.

Learn more about all types of loans available to apply online on the Mozo online lending center.

How can I get a good personal loan with bad credit?

As it can be extremely difficult to get approved for a good interest rate personal loan with bad credit, the best approach is often to try and improve your credit score.

How can I fix my bad credit score?

Improving your credit score isn’t an overnight process, but it’s worth the effort.

The first step is to get a copy of your credit report from one of Australia’s major credit reporting agencies, such as Equifax or Experian. Next, check your report for errors or possible identity fraud, because you don’t want to be caught off guard by inaccurate information on a credit check.

Once you’ve combed through your report, it’s time to get your finances in order. You will have to repay all outstanding debts. All overdue invoices will be listed on your report for five years, but will be marked as paid when you pay them. So, while unpaid bills are always a mark against you, it’s better to pay them late than not at all. You should also try to set up direct debit payment systems to avoid any further delays in payment.

Finally, limit your credit requests. Each time you do, a lender does a “thorough investigation,” which is added to your credit file. Too many difficult requests will negatively affect your credit rating.

To learn more about improving your credit history before applying for a personal loan, check out Mozo’s walkthrough. guide to improving your credit.

Before taking out a personal loan, it is essential to do your research and learn what will work best for your situation. Start by checking out Mozo’s personal loan center for more information.

Compare the best personal loans below to get an idea of ​​the types of loans that would be right for you:

* DISCLAIMER: The comparison rate combines the lender’s interest rate, fees and charges into one rate to show the true cost of a personal loan. The comparative rates displayed are calculated on the basis of a loan of $30,000 with a term of 5 years or a loan of $10,000 with a term of 3 years as indicated, on the basis of repayments monthly principal and interest payments, on a secured basis for secured and unsecured loans. basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and durations will result in different comparison rates. Costs such as withdrawal fees or prepayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may affect the cost of the loan.

^ See Mozo Experts Choice Personal Loan Awards information

Mozo provides general product information. We do not take into account your personal goals, financial situation or needs and we do not recommend any particular product. You must make your own decision after reading the PDS or offer documentation, or after seeking independent advice.

Although we pride ourselves on covering a wide range of products, we do not cover every product on the market. If you decide to request a product through our website, you will be dealing directly with the supplier of that product and not with Mozo.

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