Attempting to get a loan when you have bad credit can be a daunting task. Approaching a bank, credit union or peer-to-peer institution when your credit history is poor may seem like a recipe for failure, but there are ways that you can go at it to increase your chances of success. When a lender is worried that you will miss payments or be lagging behind on a loan, you may have to pay higher interest than a person who has better credit.
You should recognize what bad credit is, and double-check your credit history; what you think is a poor credit may 
not actually be unfavourable. Bad credit basically means that, in the past, you have not been able to successfully meet credit agreements. This affects the Credit Reports that are used to tally a person’s score; you desire a high rating, and can achieve this by meeting credit obligations with the full amount, and within the allotted time period. It is interesting to note that the percentage of employers who are looking into a person’s credit history is rising in the United States and Canada. Additionally, there many other times you may run into problems due to poor credit: insurance companies, utility companies, cell phone providers, and even landlords may require a credit check, and some will adjust deposits accordingly—if they don’t just turn you down.
Check your yearly credit report; while there is no dividing line between “good credit” and “bad credit”, there is an accepted rule that below 620 may be perceived as poor and above 620 may be considered good. This is a free credit check, so it is definitely worth investigating and monitoring. And if you think you might have bad credit, it is a good idea to ensure it’s true; it may not be as much of a deal-breaker as you think
There are a few places you can go when applying for a loan, even with bad credit. A credit union is an advisable place to go; they have staff that will sit down with you, talk about your personal history, and discuss options. They are not as driven by profit as standard banks, and thus will not turn you down just because you have a certain credit score or history.
Peer-to-peer lending is an alternative option. This involves borrowing money from another individual so you may be able to find someone who is able to offer lower interest rates than a financial institution (the lenders are still driven by profit, however, and choose which loans they wish to invest their money in). This is a relatively new sector, owing its existence to the rise of e-commerce, but it can open up some different opportunities. And more to the point, it can save time and money.
And lastly, it never hurts to discuss taking a loan from family or friends. Their personal history with you helps, and they may waive interest or strike some similar arrangement. Plus, if you are applying for a loan from a bank or credit union, a relative or friend co-signing a loan might make the difference between being accepted and being declined.
