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How do I get a Line of Credit with Bad Credit?

By Tess C. Taylor
Updated May 16, 2024
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Getting a line of credit with bad credit can be difficult if you have a poor payment history or have experienced other financial problems that have led to a bad credit score. Having a bad credit history can make it nearly impossible to use credit to pay for eduction or buy household items, vehicles, or homes. It is possible to obtain a limited line of credit, however, thanks to programs offered by buy-here-pay-here lenders, rental services, payday lenders, secured credit card companies, and credit rehabilitation programs.

In the short term, when bad credit prevents consumers from being able to borrow cash to pay for unexpected emergencies or bills, a payday loan may be an option. Payday lenders typically allow people with bad credit to borrow against expected income, but it often comes at a high repayment interest, which can be difficult to repay. Payday loans provide cash to pay for occasional needs, but over-reliance upon them can signify poor income management skills and can lead to more credit troubles.

When bad credit causes consumers to not be able to buy a vehicle or household items, there are ways to earn a line of credit through rental services and buy-here-pay-here programs. This allows you to finance larger purchases by making payments directly to a dealer. Generally a down payment or deposit is required and higher interest rates can apply, but for consumers who cannot get a line of credit, this may be the only option to buy furniture, appliances, vehicles, and other life necessities on credit.

For some consumers who need a line of credit with bad credit, the option to get a secured line of credit or a secured credit card works well. Banks and credit card companies generally have some form of secured credit card program that offer credit against a savings deposit made by the borrower. Some banks also allow for if a co-signer with good credit authorizes being a joint cardholder on the account.

There are also credit rehabilitation programs that allow consumers to earn a line of credit by making a small deposit or and then borrowing against a set amount with regular repayments over time. These credit programs gradually increase the line of credit as the consumer proves that the credit is being handled responsibly. In addition, the activity is reported to credit agencies to create a new positive history. Once this occurs, an unsecure line of credit can be established, which helps the consumer improve his credit score and rebuild a solid credit history.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By andee — On Sep 29, 2012

I only get paid once a month and it can be really hard to budget for everything with that kind of pay schedule. I never know when something unexpected is going to come up. When I first started working at this job it took me awhile to get used to this, and my money managing skills weren't the greatest.

I have used rental stores to buy my washer, dryer and a couch. I know I am probably paying more in the long run, but this was the best way I knew how to go about doing this since I had bad credit. I haven't missed a payment yet, so hopefully I am building up my credit score again.

By myharley — On Sep 28, 2012

I can understand why lenders are reluctant to give car loans to people with bad credit, but it can also be very frustrating for the person trying to get the loan.

My daughter ran into this when she was trying to get a car loan. They would have given her the loan, but the interest rate they would have charged her was astronomical. She was working at a good job making steady income, so I helped her out by co-signing on the loan for her.

Not everyone has someone willing to take this risk, so it is a good thing there are other ways out there for people with bad credit to get a loan. You will just have to expect to pay more for it.

By SarahSon — On Sep 27, 2012

Using a credit rehabilitation program has been a lifesaver for me. It can be hard to get a loan with bad credit and even harder to re-establish good credit. This service was the perfect way for me to do that.

I only had to start out with a small deposit, which is all I really had. It was like taking baby steps and the more responsibility I showed, the more I was given.

By LisaLou — On Sep 27, 2012

I have been in tough situations when I needed some cash right away, but I would not recommend using a payday loan service unless it is absolutely necessary.

I expected the interest rate to be high, but never realized they were going to charge that much in interest. I know some people rely on payday loans because of bad credit, but I think this can just get you further in debt.

Sometimes it comes down to poor money management, and other times it is just a stroke of bad luck. The high interest rate motivated me to get a temporary second job to have some extra cash coming in and help me start to get ahead.

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