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Articles » Low Credit Score Loans | | Bad Credit Loan: Things That Would Disqualify You from Getting One When You Have a Low Credit Score |
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Borrowing money with a low credit score may require more than what you have to offer. There are certain types of loans for people with low credit score, such as FHA mortgages and Perkins Loans offered through FAFSA that require underwriting by the government. These are secured loans in the eyes of the banks and mortgage brokers, because the risk is being taken by a government agency and not by the lender. Because they are essentially federal funding, there are rules and guidelines for qualifying and disqualifying applicants.
One of the disqualifiers is a criminal record of any kind. The U.S. government will not give out a HUD loan or student aid to anyone who has been convicted of a crime. Criminal convictions remain on your credit report permanently so if you have any, don’t bother to apply for a federally subsidized loan. You will have to seek other options.
Secured loans are given to those who have enough money in the bank or an asset that is worth the amount of the loan to put up as collateral. Just having it available on the application day will not necessarily qualify you for the loan, though. The account history is taken into account as is your payment history with your creditors. If you attempt to alter or be misleading when you report these items, you will be disqualified for the loan.
A default with another loan agency will disqualify you for a low credit score loan or any loan for that matter. Also, having too many loans out at once will disqualify you with most lenders. Borrowing from Peter to pay Paul is not a sound financial strategy. If you have too much debt, you need to pay some of it off before you apply to go into more debt. Not all lending agencies report their account histories to the credit bureaus, but denying the existence of open lines of credit could disqualify you for a loan and possibly result in fines or penalties if you are applying for government assistance. Be honest when applying for any loan and your chances of success will be much greater.
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