More than one-third of Americans have credit scores rated as “fair” or “poor.” These scores put them below the standard minimums needed to get mortgages and personal credit lines.

Fortunately, having a low credit score doesn’t mean you’re completely cut off from accessing the credit you need. Low credit lenders specialize in working with Americans with credit scores below 670. Keep reading now to learn what to expect when working with low credit lenders.

Credit Score Rankings

Knowing where you stand with your credit rating is the first step in knowing what to expect. An “excellent” or “exceptional” credit score is anything above 800. Only around 20 percent of Americans can claim to have credit this good.

Americans with scores between 740 and 799 have “very good” credit. About 25 percent of Americans fall in this category.

The average American credit score is 706. This falls in the “good” category which ranges from 670 to 739.

About 18 percent of Americans have “fair” credit ratings of between 580 and 669. The remaining 16 percent of American consumers have “poor” credit scores that fall between 300 and 579.

Getting Loans With Poor Credit 

Traditionally, consumers with the best credit scores get the lowest interest rates when borrowing money. This is because their credit histories lead lenders to consider them low risk.

Bad credit lenders, however, understand that everyone needs access to credit. Personal credit lines can be essential to buying a car and achieving stable housing, both of which give Americans the tools they need to improve their incomes and their credit scores over time.

To that end, bad credit mortgage lenders extend credit lines to consumers with low credit scores every day. They compensate for the higher risk by charging marginally higher interest rates.

While these rates are higher than those offered to consumers with high credit scores, they are still much lower than those available from other low credit score borrowing options such as payday loans. This makes traditionally-structured guaranteed installment loans the safest way to get the financing you need.

As a bonus, taking out the no credit check loans direct lenders provide can help you improve your credit score over time. Every time you pay your installment payment, you push your credit score in the right direction by showing that you can pay debts down on time.

Choosing Credit Lenders

Here’s how to evaluate bad credit lenders when you’re looking to take out a loan.

First, don’t limit yourself to local lenders. Community banks and credit unions are popular choices but they can’t always give you the best rates. Check out online lenders to make sure you’re getting competitive offers.

Second, be upfront about your credit score. The right lenders will be happy to work with you and you don’t want to waste your time on lenders who only deal with high credit score consumers.

Third, be realistic about how much you need. It is easier and more efficient to get one loan for all the credit you need than to reapply for multiple loans because you underestimated your needs the first time.

Learn More

Learning to navigate credit lenders is an empowering step in your financial life. Learn more great financial tips and tricks by browsing the other great educational articles on our blog today.