
- January 31, 2025
- Mark Elwes
Do You Have Any Chance of Getting a Loan If You Have Very Bad Credit?
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What happens when you need urgent cash but fear loan rejection due to poor credit? Certain aspects like missed payments, CCJs, and bankruptcy affect the credit score. Moreover, individuals with troublesome renting histories, unverifiable details, or unhealthy financial links may witness a drop in credit scores. Whatever the issue, a bad credit score does not eliminate you from getting a loan approval.
You may get a loan despite a bad credit history. However, the terms you fetch could be competitive. It means you pay more on the loan than on a general application. Do you want to fetch affordable ones, read ahead. The blog lists the chances of getting a loan with very bad credit and ways to reduce the associated costs.
What does a very bad credit rating imply?
A very bad credit is the lowest rate on a credit rating agency’s scale. It impacts your chances of getting basic or small cash assistance, personal loans, or affordable credit cards. The loan provider may reject the applications due to excessive debts, low credit utilisation limit, missed payments or defaults. It means if your credit score is 0-560, you have a very poor credit score. The loan providers reject applications due to unreliable finances and no repayment potential.
Why is it difficult to get a loan with a very bad credit rating?
Poor credit rating reveals a person’s inability to ensure financial discipline. This insecurity on the part of the loan providers makes it difficult for the person to qualify. Moreover, such persons share only a few options when it comes to getting personal loans. Here are other reasons that affect the loan approval for poor credit people:
1. You Don’t meet the criteria
Every loan provider has a set of terms that helps them lend to borrowers. It may include the credit score criteria, income requirements and the documents. Accordingly, they check your finances and approve the loan. If your credit score or income is below the criteria, you won’t get a loan. One sets it according to the prime authority. It helps safeguard the interest of the borrower and the customer.
2. Risk of losing the money lended
Past credit mistakes do impact your current financial requirements. If you defaulted on a payment earlier, you may struggle to qualify. It is because the loan provider shares the risk of losing the money that he lends to the borrower. Moreover, defaulting may affect the other person’s financial well-being. Thus, getting a loan with a poor credit rating is difficult.
3. Inexplainable debts and income gaps
Sometimes, the experts get confused while checking the finances. It becomes challenging to understand the person’s affordability. For example, long employment gaps without explanations remain questionable. Alternatively, your inconvenience in explaining certain debts may confuse the provider further. When one struggles to determine the affordability, you may face loan rejection.
Is there a possibility of getting a loan with a poor credit score?
Yes, you may qualify for loans with a very bad credit rating. However, the interest rates you fetch may be higher than with a good credit loan. Moreover, you share fewer options to check on for your small, medium, and long-term needs. Some loan providers may demand additional proof like- collateral, guarantor, or co-signer to approve the loan application. It is when you don’t meet the terms.
Alternatively, you may qualify for very bad credit loans with direct lenders if you hold a consistent and handsome income. It reveals your potential to make timely payments on small loans, given the high payment. Thus, you may even qualify for affordable rates in this case. You can even provide a part-time income source if the provider asks you to. It increases loan affordability, and you may qualify for the cash even with a very poor credit score.
How to improve the chances of getting a loan at a very poor credit rating?
You can take certain steps to boost your loan approval chances with a chequered credit history. Unlike bad credit, you need to work harder to get a loan here. The below aspects may help you qualify:
1) Apply for a lower amount
It is one of the most important aspects to get a quick loan despite a bad credit history. Check whether you may choose a slightly smaller amount than what is needed. If yes, it brings down your interest costs drastically. Ultimately, it reduces the risk for the loan provider. Hence, you may get instant approval.
- Send a notice of correction to credit agencies
A notice of Correction is a document that states your objection to a particular debt in your credit report. You may file it if you believe you have paid it or you don’t know anything about it. The credit agencies may then reply after analysing the report. However, it may take some time to get a response. If the plea results out to be right, your credit may improve. It may help you qualify for the loan. Later, repaying the loan in instalments keeps your credit in good form.
3) Improve income possibilities
Providing a higher income source may help you get instant loan approval. However, you must hold valid proof of the same. You may get a loan if you earn part-time, full-time or are self-employed. Check whether you can provide additional income to qualify. Things like- earnings from rent, dividends, and property investments count as income. You can use this to get a loan for better rates.
4) Pre-qualify before applying
Most individuals apply without checking or comparing the rates. Identifying it is important to improve approval chances and pay less on the loan. Pre-qualification does not affect your credit rating. This is especially true with small loans with a payout of up to £3000.
You don’t need to undergo a detailed check under this. You may get these no-credit-check loans in the UK from a direct lender easily. You don’t lose your credit score after the credit check. It does not imply a loan without a credit screening process. No regulated loan provider offers that. The process helps you know the most affordable quote and save money.
5) Provide a guarantor or co-sign the loan
Determine the best ways to improve your approval on the loan. One such way is by getting a guarantor. However, small loans do not require one if you earn a basic income. Alternatively, unemployed ones can consider a guarantor-based loan or co-sign it. It helps you reduce loan costs and qualify instantly.
Bottom line
Thus, you may qualify for a loan with a very poor credit rating. Individuals with consistent income, good employment history and stellar payment backup may qualify. It helps you get a loan with better interest rates and terms. Alternatively, check whether you can wait and improve your credit score. It will help you reduce the overall amount to pay on the loan.

Mark Elwes is the Editor-in-Chief at Extramilefinance. He is a notable member of the content strategy team since his joining in 2017. Driven by his fondness for the finance industry, he has spent years gathering as much knowledge as possible about various financial products that include loans also. Previously, Mark worked as a senior journalist writer with experience in writing blogs and articles.