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Personal Loans for Terrible Credit: How to Get Approved in Houston

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by Joe Mahlow •  Updated on Jan. 16, 2024

Personal Loans for Terrible Credit: How to Get Approved in Houston
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Are you lately searching for personal loans for terrible credit? So your credit demands are in the dumps, and you need some cash, fast! You're not alone. Tons of people in Houston have been there before.

The good news is that even with bad credit, you can still get approved for a personal loan. This can help you out in a pinch or consolidate high-interest debt. It might take some extra work, but where there's a will, there's a way. Your journey to credit repair Houston starts here.


Personal Loans for Terrible Credit Approval

The key is finding the right lenders who want to help people in your situation. We're talking about the places that look at more than just your score. Some lenders still approve personal loans for terrible credit. They are financiers who want to see that you're making an effort to improve your situation.

Places like ASAP Credit Repair, Upgrade, and Avant are known for working with people to rebuild their credit. If you've been working to pay down debt, correct errors, or build some good payment history, tell them about it! Honesty and transparency are key.

With some persistence, you can find a lender to help you out. A personal loan could be just the thing to get you back on track or take care of life's little (or big) emergencies when your credit isn't at its best. Don't lose hope! With the right information and strategy, you've totally got this. Now go get that cash!

Understanding Credit Scores and Why Yours Is Terrible

personal loan for terrible credit
Increase your credit score houston to get approved personal loans for terrible credit

To get approved for personal loans for terrible credit, you first need to understand why your score is so low. Credit scores range from 300 to 850, and anything below 600 is considered poor. Yours is likely low for one of a few reasons:

Late or missed payments

Paying bills late or defaulting on loans is one of the biggest factors that tank your score. Each late or missed payment can lower your score by up to 100 points and stay on your report for 7 years. If this is your issue, you need to establish a good payment record going forward and consider asking creditors to remove old late payments from your report.

High credit card balances

If your balances are close to or over your credit limits, your score will suffer. Keep your balances low relative to your limits, ideally 30% or less. Pay down high-interest debts as fast as possible.

New credit

Applying for a lot of new credit in a short period, known as "rapid rescoring," makes you seem risky to lenders and hurts your score. Only apply for new credit when needed.

Short or no credit history

Not having a long enough credit history or a mix of accounts in your name can also yield a poor score. You may need to build credit by becoming an authorized user on someone else's credit card account or taking out a credit-builder loan.

You can still take steps to improve your terrible credit score over time. Pay all bills on time, keep low balances, limit new applications, and check your free annual credit reports to find any errors. Most negative items will fall off your reports within 7 years. As your score improves, you'll qualify for better interest rates and loan terms. Hang in there with discipline and patience; you can achieve a good score and get approved for the financing you need.

Types of Lenders That Offer Personal Loans for Bad Credit

When you have bad credit, qualifying for a personal loan in Houston can be challenging. However, a few types of lenders may still approve you, even with a low credit score.

Online lenders

Online lenders like Upstart, LendingClub, and Prosper specialize in personal loans for terrible credit. They use more than just your credit score to determine your eligibility. They also consider your education, job history, and earning potential. Interest rates will still likely be higher than average, but you have a good chance of approval, and they report payments to the credit bureaus to help you build credit.

Credit unions

Local credit unions are nonprofit organizations that aim to serve their members. They often have more flexible lending criteria and lower interest rates than big banks. If you've been a long-standing member with direct deposit and a good payment history on other accounts, you have a better shot at approval for a personal loan, even with bad credit. Shop around at a few credit unions in Houston to compare rates and eligibility.

Payday alternative loans

Some credit unions offer payday alternative loans (PALS) for bad credit borrowers. These small-dollar loans have lower interest rates and fees than traditional payday loans. To qualify, you typically need to be a credit union member for at least a month and have a steady income source to repay the loan. PALS reports to the credit bureaus, so making on-time payments can help build your credit over time.

Peer-to-peer loans

Peer-to-peer lending marketplaces like Upstart and LendingClub allow individuals to lend money to personal loan borrowers. Loan terms and interest rates vary based on your credit, but people with bad credit scores can still get approved, often more easily than with traditional banks. 

Peer-to-peer loans also report to the credit agencies, so they can help you establish a good payment pattern to improve your credit if you pay on time. With bad credit, you have options for personal loans in Houston. 

Do some research on your own, check your eligibility at a few places, and make sure you understand all the terms before accepting a loan. Building a good payment history is key to repairing your bad credit, so only borrow what you can afford to pay back.

Improving Your Credit Score Before Applying

Before you apply for a personal loan with bad credit in Houston, work on improving your credit score. The higher your score, the better your chances are of getting approved and receiving a lower interest rate. 

Here are some tips to boost your score to get approved for personal loans for terrible credit:

Pay Down Balances

High credit utilization ratios (balances that are a large portion of your limits) hurt your score. Pay down your credit card balances to 30% or less of your limits. 

For example, if you have a $5,000 limit, keep the balance under $1,500. Pay more than the minimum due each month to lower balances quickly.

Check for Errors

Request a free credit report and check for any errors. Dispute them with the credit bureaus to get them corrected. Errors in your reports can lower your score.

Limit New Applications

Applying for a lot of new credit in a short time can make you seem risky to lenders and lower your score. Avoid applying for new credit cards or loans unless necessary.

Become an Authorized User

Ask someone with good credit to add you as an authorised user on one of their credit cards. Their good payment history can help boost your score. Just make sure they continue using the card responsibly. Eventually, you’ll increase your score too and will have a chance to get access to personal loans despite terrible credit.

Negotiate with Collections

If there are any collections accounts on your reports, try negotiating with the collection agencies to have them removed. Offer to pay a portion of the balance in exchange for deleting the collection account from your credit reports. Removing collections can increase your score.

Boosting your score by even just 50 to 100 points can make a difference in your approval odds and interest rate. Give your score 6 to 12 months to improve before applying for a personal loan. Monitor your progress by checking your score and reports regularly. With time and consistent responsible credit habits, you can achieve a good score and gain access to better financial opportunities.

How to Get Approved for a Personal Loan With Bad Credit

Getting approved for personal loans for terrible credit can be challenging, but it's not impossible. By following a few key steps, you can increase your chances of qualifying for a loan that meets your needs.

Check your credit score and credit report

Knowing your credit standing will help you determine the types of loans you may qualify for. Check for any errors on your credit report and dispute them to get them corrected. The higher your score, the better your options. Scores below 600 will limit you to bad credit personal loans.

Compare lenders and loan options

Do some research on lenders that offer bad credit personal loans, like OneMain Financial, Avant, and LendingClub. Compare interest rates, fees, loan amounts, and terms to find the most affordable option for your needs. Loans for those with bad credit typically have higher APRS, so look for the lowest you can find.

Provide documentation to verify information

Lenders may ask for documents like pay stubs, tax returns, or bank statements to verify the information on your application. Be prepared to provide any documentation they request to speed up the approval process.

Apply for preapproval first

Getting preapproved by a lender allows you to check if you qualify for a loan before you officially apply. The pre-approval process is a soft inquiry, meaning it won't hurt your credit. Once preapproved, you can move forward with the full application, knowing there's a good chance of getting approved.

Consider a cosigner

If your credit score and income aren't enough to qualify on your own, ask a cosigner-like a parent, spouse, or friend with good credit to apply with you. Their good credit can help offset your bad credit and increase your chances of approval and lower interest rates. Just be sure the cosigner understands they will be responsible for repaying the loan if you default.

Apply With Collateral

If applying for a secured personal loan, use valuable collateral like a vehicle, savings bonds, life insurance policy, etc. to secure the loan. The collateral reduces the lender's risk, increasing the likelihood of approval and better terms. Make sure you understand the risks of secured loans before proceeding.

With patience and perseverance, you can find a personal loan for terrible credit in Houston. Following these tips will help strengthen your application and get approved at the best rates and terms possible given your current situation. Shop around at different banks and lenders, work to improve your documentation, and consider using a co-signer or collateral if needed. There are options out there if you look for them.

While it may take some extra effort, accessing credit when you have a bad score is possible. Stay determined and don't get discouraged. With time and diligent payments, you can increase your credit and open up more opportunities.

How Asap Credit Repair Houston Can Help

Asap Credit Repair Houston can help you through the personal loan application process for those with bad credit. They understand that life happens, and sometimes credit scores take a hit. Their credit experts will work with you to develop a personalized plan to help boost your score over time so you can qualify for a personal loan.

They Help Check Your Credit Report

The first step is to check your credit report to understand why your score is low. Look for any errors or signs of fraud and dispute them. ASAP Credit Repair Houston can help you through the dispute process to get incorrect information removed. They'll also check for any collections accounts and negotiate with creditors to potentially get them reduced or removed from your report.

They Guide You On How to Pay Down Revolving Debt

If you have high balances on credit cards or other revolving accounts, work to pay them down. High utilization ratios, meaning you're using a large portion of your available credit, severely hurt your score. ASAP Credit Repair Houston can create a customized plan to help you pay off debt through consolidation or settlement. Reducing balances will boost your score over time.

They’ll Make Sure That You Limit New Credit Card Applications

Apply for new credit only when necessary. New applications can lower your score by a few points with each request. ASAP Credit Repair Houston will work with you to determine if applying for a personal loan now makes sense or if you should wait a few months for your score to improve before applying.

ASAP Credit Repair Houston can walk you through all these strategies in detail. Stick with their plan, and your score will start to improve, increasing your chances of getting approved for a personal loan. Staying dedicated and consistent with help from the experts at Asap Credit Repair Houston is the key to overcoming bad credit and getting your finances back on track.


So there you have it, people of Houston, some straight talk on how to get approved for a personal loan even with a lousy credit score. The key is to be realistic, do your research, clean up your reports and scores as much as possible, and apply to the right lenders. Focus on local credit unions and online lenders that specialize in bad credit, provide evidence you can repay, and be upfront about your situation. It may take some work, but with determination, you can find a loan that fits your needs. Don't get discouraged; keep at it! Learn from your mistakes, and make a plan to improve your credit over time. Where there's a will, there's a way. Increase your chance to get approval on personal loans for terrible credit. Now go get that money and put it to good use.


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