How can I get a loan with bad credit?

Last Modified 16th of February 2021

Your credit rating is simply a record of your previous credit history and gives potential creditors an indication of how well you handle your debts so that they can judge how risky it would be to lend you money. If your credit is bad then quite simply you are a bigger risk and getting credit will be harder than if your credit was good. However, getting credit probably isn’t impossible…

If you are asking this question then you probably want one of two things:

You need to borrow money to cover a purchase

If you want to borrow money because you need the money then you might be in a tough spot, but it really depends on what the money is for. You should expect to pay a higher interest rate because you are a higher risk, so the lender needs to make more money out of you to make the risk worthwhile.


The easiest types of credit to get are going to be secured loans (loans secured on your car or home) and very short term loans (payday loans). Although, such loans are very expensive and in almost all circumstances you should try to simply do without the money.

If the money is for a big purchase then see if the vendor will give you credit. When buying furniture or a car it is relatively easy to get credit because the dealer is making money from the sale and if therefore incentivised to give you the credit.

If all else fails and you are facing a financial shortfall, your best bet may be to talk to your bank manager. With your bad credit you will not automatically be approved for an overdraft but if you tell your bank you are having financial difficulties they will usually do their best to help.

You want to start improving your credit history

If you don’t need the money but you simply want to improve your credit rating then you are in a much better position because you can be picky about which credit sources you consider. Any form of credit will help your rating but you should consider the cost of the credit and whether it is worth it.

One easy option is getting a fuel card or a store card. These typically work out very expensive if you don’t pay in full each month, so be careful. If you are prepared to keep on top of it though these cards are generally easy to get even with poor credit and they can quickly improve your chances of getting a more traditional credit card.

Getting a mobile phone on contract is also a form of credit that is easy to get and chances are you use a phone anyway, so this one kind of makes sense.


Of course the ideal option is to get a credit card if at all possible, although if your credit is very bad that might be difficult. Once you have had a store card for a few months you should be able to get one of the credit cards for people with bad credit and using that for another few months should result in a reasonable level of credit worthiness.