One of the major roadblocks to getting a loan is bad credit. And this is understandable. A person with a bad credit score has one because they have not met their obligation to pay back money in the past.

However, there comes a time when many people have genuinely reformed and are simply looking for credit for the same reasons as anybody else. Perhaps they have a vision for a new, viable business. Perhaps they need additional credit to expand their existing operations. Maybe a short term loan is needed to cover a temporary cash flow problem. All of these are legitimate reasons for wanting new credit. But each of these remains a fantasy so long as a poor credit score remains. So what can be done?

Use Secured Loans

Most major banks will rule out offering you any form of credit if you already have a bad credit rating. It’s just part of their standard procedure. It doesn’t matter how good your intentions are now. Because they deal with millions of customers every day it’s just not efficient for them to listen to your individual story.

However, there are creditors who offer ways around the problem. Loans from Evolution, for example, are secured against your home. This means that you can effectively circumvent the credit rating system. Because the lender is guaranteed to recover the money, they’re more willing to lend in the first place. Secondly, it means lower interest rates, and ultimately, lower payments overall. And this is good news for anybody who has struggled to meet payment deadlines in the past.

Get Somebody To Co-Sign A Loan

Banks and building societies just follow a formula when it comes to individual credit ratings. However, your friends and family do not. Unlike banks, they know you better and they know whether you’re likely to make loan repayments in the future.

If you have reformed, your family or friends will know this and might consider making a loan when a bank wouldn’t. In these situations, you might ask them if they’d be willing to co-sign any loan. Your co-signer must be prepared to meet the full cost of the loan if you can’t. And you must be prepared to face their wrath if you can’t make any loan repayments.

How well this system works really depends on the quality your relationship with your co-signer. Relationships can turn sour if you don’t do everything in your power to maintain your side of the deal.

Ask Family

Rather than co-signing with a member of your family, you can always ask for a loan outright.

Before receiving any money, it’s best to write down a formal agreement detailing any interest or collateral. This is important to protect both you and your family from future financial uncertainty and hardship.

The benefit of asking family members directly is that interest rates are likely to be a lot lower. This is especially true if you have elderly parents looking to reduce their assets before their estate is passed on.