When you have bad credit, it can be hard to find a loan that works well for your situation. However, loans are an important tool when it comes to building your credit score. Luckily, there are options available for people to build their credit even if they have a bad credit score.
A common misconception is that you can’t get a car loan without good credit. That is actually not the case. In fact, you can get a car loan because it is a type of secured loan. This means you ensure to pay back the loan with some sort of collateral. In this case, your collateral would be your vehicle. This means the bank will take your car if you fail to repay the loan. A downside to this loan type with bad credit are the interest rates that you may face. Oftentimes, bad credit auto loans will have a higher interest rate.
Store Credit Cards
You may have heard to avoid these types of credit cards. However, if you handle these responsibly then they can be a great tool when it comes to improving your credit score. You can even choose stores like the grocery store where you will consistently shop and repay any balance on your card. Depending on the store credit card, the store will either run a hard or soft inquiry. However, some stores may not require any type of credit pull at all!
Online and Catalog Retailers
Many people forget how useful catalog and online retailers can be when it comes to your credit. Typically with a small deposit, you can open an account that will begin building your credit score.