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Getting Approved With a Low Credit Score

Posted on May 5, 2011

By now, you probably know that banks, insurance companies, and other businesses check your credit score as part of the process. You’ve probably experienced one of the downsides of having bad credit – having your applications denied. Fortunately, there are ways you can be approved even if you have bad credit.

Make a Bigger Down Payment

When you’re applying for a mortgage, the lender may approve your application if you can make a larger down payment. A larger down payment means you’re accepting some of the loan risk and possibly even lowering the amount of the loan. You may have to increase your down payment by several thousand dollars to qualify for the loan.

Use Non-Traditional Tradelines

One of the unfortunate things about your credit reports with the major credit bureaus is that they only contain major accounts like credit cards and loans. They don’t include payment history from all the other accounts you faithfully pay on time each month, like your rent or your cell phone bill. Some lenders may be willing to look at these non-traditional tradelines and use them to process your application. You have a report that includes these types of accounts with a bureau known as PRBC, or Pay Rent, Build Credit.

Make a Security Deposit

Cell phone and utility companies will often require you to pay a security deposit if you want to get services turned on in your own name. This may be your only option for getting cable or electricity established at a new residence. Security deposits can often be returned if you make your payments on time for a certain period of time.

Get a Co-Signer

If all else fails, you can ask someone else to co-sign for your credit card or loan. As long as the co-signer has a good credit score, your application will probably be approved. Keep in mind, though, that the co-signer takes on a big risk when they sign up for your loan. When you miss payments, they affect the co-signer’s credit history. If you default on the account, the creditor will go after the co-signer for payment. Because it’s so risky to sign up for someone else’s loan, you may have a hard time getting someone to co-sign for you.


Apartment complexes are one of the many businesses that check your credit report before they approve you. If you have bad credit and need to move into an apartment that denied you because you have bad credit, you can prepay your rent. Yes, this is expensive and may mean you save up several thousand dollars. Many apartments have short-term leases, as short as three months, that will reduce the amount you’d have to save up to move in. The other option for renting with bad credit is to find an apartment that doesn’t do credit checks.

You can still borrow money and have access to many services even though you have bad credit, but you might have to pay a higher price to get the approval you’re looking for.

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