Struggling with a low credit score can feel like one door after another keeps slamming shut. When bills pile up or your credit history works against you, getting a loan or a line of credit can seem out of reach. But there are lenders out there who will look beyond your credit check.
If your credit took a hit from missed payments, old credit card debt, or your credit history is patchy, there are still ways to borrow even if the bank or credit union says no. The important thing is knowing which options make sense, what to avoid, and how to protect yourself from predatory lenders.
What does a bad credit score mean?
Credit scores range from 300 to 850; anything under 580 on the FICO scale is considered poor. A low score tells traditional lenders you’re a higher risk, which can lead to high interest rates or outright rejections.
Borrowers with bad credit scores usually have:
- Missed or late payments
- Used most of their available credit
- Limited or no credit history
- Recent collections or charge-offs
But having poor credit doesn’t mean you’re out of options. It just means you need to know where to look for the best personal loan for your circumstances.
Some personal loan lenders focus on your recent payment behavior, your income, or if you have a co-signer, rather than your score alone.
Loan Options for Bad Credit Scores
When your credit’s not in great shape, some loans are easier to get than others:
Unsecured vs Secured Loans
Secured Personal Loans
Secured loans are backed by something you own, like a car or a savings account. Because the lender has some protection if you don’t repay, these loans can sometimes be easier to get and can come with lower interest rates.
But they also carry additional risk for you. If you fall behind on payments, the lender has the right to take the asset you put up.
Unsecured Personal Loans
Unsecured loans don’t require any collateral, so you’re not putting your property or savings on the line. Instead, approval is based on your income, ability to repay, and recent financial behavior, rather than only your credit score. That makes unsecured loans a flexible and less risky option for many borrowers.
Short-Term Loans for Bad Credit
These loans are designed to help cover urgent expenses and are often easy to access for borrowers with low credit scores.
Payday Loans
Payday loans are quick, small loans that usually have to be paid back by your next payday. They’re simple to get if your credit score’s low, but the fees can be high, and the repayment time is short. They might help in an emergency, but it’s important to know exactly what it’ll cost you before you agree to one. Payday loans aren’t available in some areas due to some state laws, so you may have to look at other loan options.
Installment Loans
Installment loans let you borrow a fixed amount and repay it monthly over a set period. They’re usually easier to manage than payday loans and are used for larger expenses like car repairs or utility bills. Many lenders in our network provide installment loans to borrowers with less-than-perfect credit.
Tribal Loans
Tribal loans are issued by lenders that operate under tribal law. These lenders are often open to working with borrowers rejected elsewhere. Repayments are usually made in installments, giving you more breathing room than a payday loan.
Credit Builder Loans
Credit builder loans are designed to help you improve your credit score while building a repayment history. These loans work a bit differently: instead of getting the money up front, the lender holds the funds in a secured account while you make monthly payments.
Once you’ve made all your payments, the money is released to you, and the on-time payment history is reported to the credit bureaus. It’s a slower way to access funds, but it can be a good option if your main goal is rebuilding your credit over time.
This type of loan is ideal if you don’t need money right away but want to boost your score to qualify for better options down the line.
Cash Advances
Some borrowers turn to credit card cash advances when they need money fast, but this loan option for bad credit often does more harm than good.
A credit card cash advance lets you withdraw cash against your available credit limit. You can get the money through an ATM or bank, but it comes at a price: most cards charge a cash advance fee (typically 3-5% of the amount) and apply a higher interest rate than for regular purchases. On top of that, interest starts building immediately, so there’s no grace period.
For borrowers with poor credit, these drawbacks can be risky. If your balance is already close to the limit or you’re struggling with repayments, adding a cash advance can push your credit utilization even higher, which could hurt your score further. Unlike using a personal loan, you don’t get a fixed rate repayment plan; you just have growing debt on your card.
Unless it’s a last resort, it’s often smarter to consider short-term installment loans or other options like a small loan for a 500 credit score. These alternatives will have clearer rates and terms, so repayment is more straightforward.
What’s new for bad credit borrowers in 2025?
If you’ve been turned down before for loan funds, 2025 could look a little different. Lenders are starting to use new tools and credit scoring models that go beyond the basics of hard credit searches, which could work in your favor.
FICO 10 & FICO 10T Are Rolling Out
Some lenders are starting to use FICO 10 and FICO 10T, which are newer credit scoring models that dig deeper into your situation than the older versions. Rather than taking a snapshot of your credit today, these models look at how your finances have changed over time.
If you’ve been working to pay down debt or stay on top of bills, that progress could help you get approved, even if your score is still low. These models are rolling out gradually, but are expected to become more common from late 2025 onwards.
Buy Now, Pay Later Reporting Begins
Buy Now, Pay Later (BNPL) services like Klarna and Afterpay have started showing up on credit reports when providers choose to share that data with credit bureaus. For now, this information doesn’t directly affect your FICO score, but lenders might still see it when reviewing your file.
This means paying BNPL plans on time could help build trust with lenders, while missed payments or overuse might work against you. Future FICO models might formally include BNPL data, but that’s not expected until 2026.
How to Improve Your Chances of Getting a Loan
Giving lenders the right signals can make all the difference to your chances of getting a personal loan. Here’s how to boost your odds of getting approved:
Show a Consistent Income
Lenders want to see that you can afford to repay the loan. Having a steady income from a job, benefits, or self-employment can make a big difference. You’ll likely need to show proof, like pay stubs, tax returns, or recent bank statements.
Get Your Documents in Order
Having your documents ready can speed up the process and show you’re organized. Most lenders will ask for:
- A government-issued ID
- Proof of income
- Recent bank statements
- Contact details
Having everything lined up avoids delays and shows you’re taking the process seriously.
Check Your Credit Report
Before you apply, it’s worth taking a look at your credit report to see what lenders are going to see. Most of them have a minimum credit score they work with, even if it’s on the lower side, so spotting any problems ahead of time can help.
Check for anything that’s outdated or just plain wrong. Things like missed payments or collections can stay on your report for up to seven years, but they should drop off after that. If something doesn’t look right, you can file a dispute with the credit bureau to get it fixed.
Even a small fix can make a difference, as a few points can affect your chances of loan approval or access to a lower rate. While some lenders are open to borrowers with poor credit, a better score puts you in a stronger position.
Add a Co-Signer
Some lenders allow you to apply with a co-signer. This is someone with good credit who agrees to back the loan. This can improve your chances of approval and might even help you qualify for better rates. Make sure both parties understand the responsibility before moving forward.
Avoiding Predatory Lenders & Scams
When you’re dealing with bad credit, some lenders might try to take advantage. Here’s how to spot trouble early and protect yourself while applying for a loan.
Recognize the Signs of Predatory Loan Lenders
Watch out for red flags like:
- Guaranteed approval with no checks at all
- Requests for upfront fees before you’ve received a loan offer
- Sky-high interest rates (also called Annual Percentage Rate or APR) or hidden charges buried in the fine print
- Pressure to sign quickly without giving you time to read the terms
A legitimate lender will always explain the total loan cost clearly and never rush you into a decision.
Know Your Rights as a Credit Borrower
Even with bad credit, you’re still protected by lending laws. Lenders must tell you:
- The total loan amount, including interest rates and fees
- The loan term, showing when and how payments are due
- What happens if you miss a payment
If anything feels off or unclear, ask questions or walk away. You don’t have to accept a bad credit loan that puts you in a worse position.
Stay Safe When Applying Online
It’s best to stick with trusted lenders or loan marketplaces like Yup Loans, where your info’s handled safely. Always check for:
- A padlock symbol in the browser bar
- URLs that start with https
Don’t share personal details like your Social Security number or bank account information on any site that seems suspicious or doesn’t clearly explain how your data will be used.
Looking for loan options for bad credit in 2025? Let us help!
At Yup Loans, we make it simple to find the right loan options for bad credit. One online form connects you to a wide network of trusted lenders who work with all types of credit backgrounds. There’s no pressure, no upfront fees, and no endless waiting.
Need money fast? Request funds today to find the best bad credit loan for you. Most decisions take roughly three minutes¹, and funds could be in your account as soon as the next business day*.