Getting a large personal line of credit with bad credit doesn’t have to be complicated—but you need to know how to properly apply.
You don’t want to be a part of the 53% of Americans who face rejections from loan companies due to bad credit. But before we talk about your bad credit, where does a personal line of credit come in handy?
You could have a car to fix, a home to renovate, a wedding to plan, or surgery to pay for. These expenses will take a reasonable amount of money, and whether or not your credit score is bad, you’d have to act fast.
Now back to your bad credit. If you must know, getting a large personal line of credit with bad credit is possible, and we’ll show you how.
To get a large personal line of credit with bad credit:
- Understand What a Personal Line of Credit Is and What It Involves.
- Understand What Makes a Bad Credit Score.
- Check Your Credit Score.
- Find a Favorable Bad Credit Company to Work With.
- Find a Comfortable Spot.
- Gather Your Documents.
- Make Your Submission.
Let’s proceed.
1. Understand What a Personal Line of Credit Is
To get a large personal line of credit with bad credit, get the basic knowledge of a personal line of credit. A personal line of credit is a type of financing that grants you access to a specific sum you can take from when you need it, pay it back, and take it again.
So it’s almost like a credit card which could have $30,000 or more. You can withdraw $15,000 from it for a project and pay it back with interest.
After paying back, you can withdraw another $15,000 or $10,000. Contrary to the conventional financing you know, you won’t pay interest on the entire $30,000 or pay monthly.
A personal line of credit provides that even though you withdraw as little as $5,000, you would only pay interest on the $5,000 and nothing more.
Before you get a personal line of credit, lenders usually consider the following:
- Your credit score
- Your credit history
- Your income
Since this article focuses on getting a large personal line of credit with bad credit, let’s see what bad credit is.
2. Understand What Makes a Bad Credit
So do you need to get a large personal line of credit with bad credit? Understand what makes bad credit. Bad credit could range from 600 and below using the FICO standard. While this could be obtainable, it’s safe to say that ‘bad credit’ could mean different things to different companies.
However, recent statistics show that a poor/bad credit score is between 300 – 600.
A person’s history always determines credit scores in terms of how frequently s/he pays his/her bill, how much debt s/he is in, and how punctual s/he pays back. The earlier and more punctual the payments are, the higher your credit score will be. On the other hand, if you make a habit of late payments…well, you can guess the rest.
The problem with bad credit is that it becomes hard—if not impossible—to get loans, especially if you want competitive rates. The bad credit ‘stigma’ applies to all kinds of loans. Who would want to give out cash to someone with bad credit and a wanton track record? Sure, you wouldn’t do that yourself.
With that said, you are not entirely helpless if you find yourself in such circumstances. There are a few things you can do, a few steps, and a few companies you can meet to help you get your line of credit despite your bad credit.
3. Check Your Credit Score
Anyone who can find himself/herself trapped in this financial crisis doesn’t feel terrible yet! Check your credit score to get a large personal line of credit with bad credit.
While bad credit companies will not pay much attention to your credit score, some will. Thus, check it out to know how big or slim your success chances are. This way, you can make corrections where necessary and possibly increase your credit score.
4. Find a Favorable Bad Credit Company to Work With
Here’s the thing about getting a personal line of credit with a bad credit score: although you may find companies to help, most will charge more than normal on interest.
Make a list of companies that offer such services, and compare and contrast. Find out which are more advantageous than the rest, then streamline until you find the one that best suits you.
Remember that you are in a dilemma doesn’t mean you should take whatever bid that is out there. It will only get you deeper into trouble. You certainly don’t want that.
5. Find a Comfortable Spot
If you are in trouble, certainly, you don’t want to get into more trouble. After you have found the perfect or close to the perfect company, do not get greedy and take more than you can manage.
Find a comfortable spot to get an extensive personal line of credit with bad credit. In other words, request an amount you can pay back.
While these companies may give you a line of credit despite your bad credit, your credit score will worsen if you get careless with your spending. If your credit score worsens, you may find it impossible to pull another luck.
>>>GET SMARTER: How to Get a Low-Doc Personal Line of Credit
6. Gather Your Documents
The sixth step in getting a large personal line of credit with bad credit: gather your documents. Of course, no company will lend a helping hand without demanding some level of identification. As part of your preparation—one of the essential parts—gather the important documents necessary for such a venture and file them.
The basic documents would normally include:
- Personal details
- Identification of any sort
- Utility bill/mortgage statements
- Etc.
If, in any situation, you are not particularly sure about what your company of choice demands, it is best you put a call through to their customer service and get your ignorance abated.
7. Make Your Submission
It is the final step in getting a large personal line of credit with bad credit. Send your application however is convenient for you or is made available by your company.
It is a good practice to review your documents and the details you inputted to ensure that there are no recorded errors.
Conclusion
To get a large personal line of credit with bad credit, you only need to follow these seven steps meticulously. First, understand what a personal line of credit is and what it involves, then understand what makes a bad credit score.
When you get these basics right, check your credit score, find a favorable bad credit company to work with, and find a comfortable spot. Finally, gather your documents and make your submission.
No Comment! Be the first one.