How to Secure a Loan Despite Your Bad Credit Score

October 15, 2020
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If you’re taking out a personal loan but have a bad credit score, it will be a little more challenging to lock down an approval. However, it’s not impossible; it is not straightforward, but you can fix your credit history, find a lender willing to give you a chance, and do other things that ensure that a lender approves your loan.


How do you fix a bad credit score?

A bad credit score can happen to anyone, and it should not make you feel like an awful person. There are many reasons why someone would get a bad score. Making a late payment, paying less than the agreed sum, or similar actions could lower your standing, among other things.

If this has happened to you, the best thing to do is move forward and take steps to ensure that it does not happen again in the future. There isn’t a quick way to fix credit history, but something you could do is audit your current debts and terms and conditions. Make sure you’ve allotted a portion of your monthly income to pay off your dues.

You should also keep your balances low and refrain from spending your credit. The closer you get to reaching the limit, the worse your score becomes. Do not keep applying for credit either; applications place a hard inquiry on reports, which remain there for two years. Try the following steps toward improving your credit score.


Shop for the best lender for you

Admittedly, there are plenty of lenders who will not take on someone with a bad credit score. However, there are those willing to give you a chance. Note that many banks might take you on for a bad credit loan; however, they would likely put you on a high-interest rate.

Do not sign with the first lender who offers to take you on. Look for lenders around the same time as well; bunch your inquiries together and make sure they all occur within the space of 30 days. That way, it counts as one hard inquiry, and you minimize the impact on your credit score.


Find a place with a reasonable interest rate

If you have bad credit, you must accept that your interest rate will be higher. In the eyes of creditors, lending to you is a risk, so they must protect themselves by setting higher-than-average interest fees. These rates are still lower than those for credit cards, though, making them a viable option.


Research lenders who give secured loans

When you have a secured loan, you offer something up as collateral, which is a good option for someone with a bad credit score. Lenders have less risk if there is a big-ticket item like a car or home to fall back on; make sure you pay back the loan, or you might find yourself in deeper trouble.



Bad credit should not hold you back from making goals. You can secure a loan even if you don’t have an excellent credit history, but you need to be more deliberate about your application. Thoroughly research your options before settling on a lender or a plan and work with a broker or a financial advisor who can improve your credit score.

Inquire with Hoopla Loans about securing the best loan for you. We are one of South Africa’s fastest-growing online brokers, dedicated to providing our clients with the most competitive interest rates for their budget. Get in touch with us today for more details!