560 Credit Score Personal Loan
Do you have a 560 credit score? If so, then you must know how difficult it is to get credit from most lenders. That is because lenders consider anything under a 580 credit score to be poor and are wary of extending credit. But that does not mean there is no way of getting credit from lenders, you just need to know how to go about it.
How to Get a Personal Loan with a 560 Credit Score
It is important to remember that a poor credit score of 560 does not close all doors to receiving credit, but only makes it harder to find them. This means that you will need to do a lot more looking around than you would normally have to. To find a lender when you have a 560 FICO score, make inquiries from different lenders. When doing so, it’s best to avoid conventional lenders and instead focus your energy on alternative and online lenders.
Gather as many options as you can through your research before making a final decision. The final choice will come down to the terms of credit provided by the lender depending on what you need to achieve. Lenders normally perform a soft credit check upon receiving a request for credit, so you need not worry about further damaging your credit score. To get you started, consider the options below of our recommended lenders.
You should not take it negatively when a lender turns down your request for credit because there isn’t actually any such thing as guaranteed approval. Marketers and agents may advertise for guaranteed approval, but in reality, lenders must consider myriad factors before approving any requests. Even though some lenders may not check your credit score, they will still consider factors such as annual income.
How much credit can you receive?
Unfortunately, there is no way to tell how much one can borrow with a 560 credit score because every lender will probably have a different offer. Lenders consider different factors and also have varying thresholds for risk, so you will likely be offered different amounts and lending terms.
But as a general rule, lenders offer up to 2x your annual net income before tax when applying for a personal loan. A poor credit score will lower the loan amount, but other factors such as employment status and current debts will also be considered.
How to improve your chances of receiving credit at a 560 credit rating
The good news is that you can still receive credit despite a poor credit rating by following a few useful tips. One is to keep your request for credit low, below $10,000, because this presents a lesser risk for the lender. To access more credit, request smaller amounts of credit from many lenders and add them all up. Credit cards, for example, are more easily approved compared to, say, personal term loans.
Another tip you can follow is to request for a shorter loan term. Longer terms of credit are riskier for lenders compared to shorter ones, so request for a shorter term. Although it may seem like the interest rate is higher, in the end you will pay less than that person who paid lower interest for 3 to 5 years.
An even more convenient way of getting your credit request approved is to take advantage of unused credit cards. Lenders see these as potential sources of funds for repayment, and having such would improve your chances of getting credit.
See also Bad Credit Scores
How to improve your credit score
Ultimately, the best way of gaining access to credit is by raising your credit score, which can be done in various ways. The simplest and most straightforward is to pay off outstanding debt. It may seem unreasonable to tell someone seeking credit to pay off debt, but you don’t have to do all the repayments at once. Simply honoring repayment terms every month can have a positive impact on your credit score. You can even use the credit awarded to pay off some of the debts starting with the least to the most.
If you have any credit cards, ensure that your credit utilization stays below 30% or even better, 10%. You can even take advantage of credit cards that have 0% APR for the first year to reduce the amount you end up paying for the debt in interest.
Joseph Smith
Writer and editor
Joseph Smith is an experienced freelance writer with over 11 years of experience. His area of expertise includes finance, loans and lending. His work has been featured on various large websites including this one.
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