Having poor credit diminishes one’s ability to procure a loan and also renting an apartment or landing a job etc. People with poor credit have low credit scores. A credit score is a number that lenders (banks and credit cards etc.) use to identify the risk element of lending money to you. The standard credit score is called FICO score, named after the Fair Issacs Corporation which created this.

• Credit score usually range from 300 to 850; the higher your score the better is your credit. Credit scores are determined by factors such as:
• Payment history – Lenders see how consistent you have been in previous loan repayments.

The obvious solution to having poor credit is to improve your credit score. This automatically qualifies you to apply for a wide variety of loans.

• Credit unions – As credit unions are smaller entities compared to brick and mortar banks, they look into overall situation while assessing your loan eligibility. Credit unions usually have lower fees.
• Online lenders – Borrowing from an online lender lets you compare rates and fees from multiple sources thereby letting you make the best choice. The requirements to qualify for a loan from an online lender is also few as compared to others.
• Peer to peer lenders – These are actually lending networks and they are currently growing in a exponential rate. These networks offer varying interest rates as compared to the traditional banks.
• Friends and family – Having a poor credit score means many major lending institutions will not offer you a loan. Borrowing from friends and family has almost nil requirements and fees!

In the long run, it’s advised to build one’s credit to reach an acceptable score. To do that, always ensure that your bills are paid in time. Revolving debt like credit cards have an higher impact on your credit rating, always have a clean balance on your credit cards. However poor your credit score is, it can be fixed by taking conscious decisions regarding your finance.