Can You Get a Loan with a Credit Score of 500?

Find out what kind of personal loan options are available if your credit score is 500 or lower.

Can You Get a Loan with a Credit Score of 500?

The best personal loans for a 500 credit score are from OppLoans and Integra Credit. These companies specialize in lending to people with bad credit and don't even do a credit check when you apply for a loan. The best way to get a personal loan with a credit score of 500 is to find a lender that serves borrowers with lower credit scores. There are several different types of “bad credit” loans. The hard part is knowing which ones are safe and which ones are right for your specific financial situation.

While credit cards are usually the easiest type of credit to obtain with a low credit score of 500 to 550, it can also be quite simple to get some small personal loans, including short-term and installment loans. Qualifying for a personal loan with 500-year credit scores can be difficult or expensive. However, some alternative lenders, such as payday lenders, may not consider your credit score at all, but may charge very high fees and interest rates. MoneyMutual is a lending network that connects you with more than 60 different lenders specializing in short-term loans. Each of these lenders varies in their requirements, opening fee and terms, so pay close attention to each one.

FHA loans (mortgages backed by the Federal Housing Administration) have the lowest credit rating requirements of any major mortgage loan program. Those with lower credit (500-57) may still qualify for an FHA loan. But you'd have to put at least a 10% down payment, and it may be harder to find lenders that allow a minimum credit score of 500. Another attractive quality of an FHA loan is that unlike conventional loans, FHA-backed mortgages do not have risk-based pricing. This is also known as “loan-level price adjustments (LLPA).Like FHA Loans, VA Loans Do Not Have Risk-Based Price Adjustments.

Low-scoring applicants can often get rates similar to those of high-credit borrowers. A USDA loan won't work if you make too much money either. Your household income cannot be more than 115 percent of the median household income in your area. For example, a borrower with a 20% down payment and a credit score of 700 will pay 1.25% of the loan amount in LLPA. But an applicant with a score of 640 and a 10% advance will be charged a fee of 2.75 percent.

Conventional loans are available to lower-credit applicants, but their fees often mean that FHA loans cost less for borrowers with poor credit ratings. There is no direct correlation between lower credit scores and higher closing costs. But taking out a bad credit loan does limit your borrowing options, which can increase borrowing costs. For example, let's say you have a FICO score of 510 and you can only find one lender willing to approve your FHA loan. If that lender charges a higher-than-average loan origination fee, you won't have the option to buy lower rates from other lenders.

On top of this, 19% of those with a credit score of 500 have matured a qualifying debt for 30 or more days in the past decade. Auto Credit Express is best at doing this, as it is excellent at helping high-risk buyers find a dealer that is willing to give you a refi loan, despite its low credit score. This means that you may have good luck finding a lender willing to give you an auto loan, particularly if you have a hefty down payment (or valuable vehicle exchange) to further reduce the overall risk to the lender. While none of these loan companies offer direct loans, they can connect you with one or more lenders who have extensive experience working with consumers with poor credit. In general, short-term loans will have less stringent credit requirements than installment loans, but short-term loans charge much higher fees and must be repaid once on the due date. This company works with people across the credit spectrum, so you can be sure they're likely to find something for you. But what if your credit score isn't good? While there are bad credit loans, are they really a good idea? Can you get one if you score as low as 500? People with bad credit and a desperate need for cash will take these bad credit loans because they feel they have no other choice, he says. Remember that longer loans can leave you with a car that is considered “upside down”, or you owe more than the car is worth.

You can always view your latest credit score and report for free on WalletHub, the only site with free daily updates. Of course, you can get the usual loans for new and used cars, but you can also get lease purchase loans and loans for individuals. His credit card comments appear in national media outlets including CNBC, MarketWatch, Investopedia, Reader's Digest, and more. This card is for those who need to improve their credit score by being responsible with a card or those who do not have credit and want to establish some. Start with these tips, stick to them, and eventually you'll start to see your credit score improve. It may be tempting to extend the term of your loan to six or seven years in exchange for a lower monthly payment.

Auto Credit Express works with a network of car dealers who are willing to make loans when others don't. .