Are you hoping to get a loan, but feeling held back by your less-than-stellar credit score? You are definitely not alone in your predicament, as bad credit is a very common problem in this tough economy. But don’t despair, because there are still plenty of ways for people who don’t have great credit to get approved for loans.
The best thing you can do, and first step on the road to getting approved for any loan is a little preemptive improvement of your credit score and financial situation. Bettering your credit score–as well as decreasing your monthly payments and expenditures–will prove very helpful in achieving your goal of bank, car, or mortgage loan approval. Here are some things to get you started in the right direction.

First, check your credit report. I know this can be a scary, cringe-inducing thing when you know that number isn’t going to be good, but just like the first step onto the bathroom scale at the beginning of a weight loss program, it has to be done. You need to know what you’re working with, and how far you need to go to fix the problem. In short: You need a number. There are many websites that can help you get your credit score, such as,, and

Second, you need to get rid of other monthly payments or debtsas quickly as you possibly can. Dave Ramsey, professional financial advisor, has a wonderful plan to reach this goal quickly that he calls the “Debt Snowball Plan.” To accomplish this, he recommends you make a list of all your debts, from the smallest (fastest) payoff, to the largest (longest), completely ignoring interest rates. Once you’ve established the smallest debts, focus the majority of your extra money on paying those off first. The goal is to reduce to number of monthly payments you have by eliminating the smallest debts first, which many find helps them stay focused on the goal at hand. Mr. Ramsey also recommends redoing your list of debts after you eliminate each one so you can “see how close you are getting to freedom.” Very motivating!

Third, get your paperwork organized. Walking in to your loan meeting organized and prepared will increase your chances of approval. Remember, you want to show the lender that you are a capable, dependable adult who can handle the responsibility of borrowing money. So have paperwork with you that can prove you have a constant and reliable source of steady income that you will use to pay back the loan. If there have been blips in your monthly loan, mortgage, or even utility payment history, write explanations for each late or missing payment. Bad financial situations and unexpected expenses happen to good people all of the time, and lenders are aware of this, but if you want to appear trustworthy, you have to let them know that you were attempting to pay off your debts in good faith.

Fourth, consider getting a co-signer. Do you have someone in your life who knows you well and believes in your ability to pay back a loan? Obviously there is a lot of trust involved in the relationship between co-signer and co-signee, but if you are certain that you will be able to pay them back, and they are willing to put their personal finances on the line for you, this is an option that will not only help you secure a loan, but will help improve your credit score at the successful completion of loan payoff.

Having bad credit doesn’t automatically disqualify you from getting a loan. You may have to jump through a few more hoops and try a little harder than someone with good credit, but don’t give up, because it is completely possible. And once you qualify for a loan and pay it back in a timely manner, this can actually improve your credit rating, making getting a loan when you have bad credit a win-win situation for everyone involved.

Jenny Sampson is a professional blogger that enjoys providing consumers with personal finance advice. She writes for, a leading Title Loan company offering bad credit loans.