Can I Get a Loan With Bad Credit? Yes, This is How

get a loan with bad credit

You’re confused, and don’t know if you can get a loan with bad credit score?

Yes, you can get a loan while carrying a bad credit history. Financial institutions understand that life sometimes throws curveballs, and when it does, taking a bad loan might be the only option left.

Even with a bad credit score, you can apply for a personal loan and get approval. But with a higher interest rate and obviously, your chances are limited.

Having a financial bad credit score history doesn’t have to stop you from taking loans to advancing your career or getting money for emergency situations.

get a loan with bad credit score

But first, what constitutes a bad credit score and what a credit score really means?

What is a Credit Score?

A credit score is a methodology for calculating borrower’s credit scores, to determine their risk level in providing them loan facilities. Credit scores help money lenders to make quick and inform loan decisions in minutes to determine the eligibility of a loan applicant.

In Nigeria, the CRC (Credit Bureau) is responsible for providing accurate customers credit scores and is powered by FICO ( Fair Isaac Corporation) an America company with over 50 years of experience in data and analysis.

A (3) three-digit number has been developed to provide credit scores to individuals and businesses accessing loans. It ranges from 300-850, with 300 being the lowest and 850 the highest.

The Credit Score Grades are as Follow:

  • Excellent: 800 and above.
  • Very Good: 740-799.
  • Good: 670-739.
  • Fair: 580-699.
  • Poor: 579-lower.
crc credit score grades

However, for the CRC credit score built specifically for the Nigerian market by FICO to meet customer’s loan status, the following factors are taking into consideration and used to calculate credit scores.

Payment History (35%).

How often you repay your loan on time takes 35% of the score. If you’re the type that always late on loan repayment, you’re risking 35% of your credit scores.

Amount Owed (30%)

The total amount you’re owning constitutes 30% of the credit score. The minimal amount you’re owning at the time of submitting a loan application the better your chances of getting loan approval.

This is calculated on all outstanding debt you’re owning in all your financial accounts.

Pursuit of New Loan (10%).

How often an individual applies for credit or loan-related facilities in the last two years affect your credit score by 10%.

Length of credit history.

How long you’ve been taking loans without defaulting on your repayment and paying on time, and other related factors significantly increase your credit score.

Credit Mix (10%).

The variation of credit or loan type you’re carrying at the time. Like credit card loans, personal loans, rent loans, mortgage loans, etc.

All these factors put together will determine your credit score by the CRC and used by lending institutions to give loan decisions in minutes.

How to Check Your Credit Score

If you’re concern that your credit score might not look so good, and you want to know before applying for a loan, you can do so yourself.

Visit the Credit Bureau website and register on the website via your email address. It only takes two or three minutes to do this. Confirm your email address and return back to the site.

Then click on “Product” at the top navigational menu on the page. Choose the CRC credit score (individual) package on the page. It will open a new page and it only cost #400 to get your credit score as at the time of writing this post.

The next thing is to click on the “add to cart” button at the bottom of the page. You will get your credit report via your email address within minutes of making payment online.

You can now know ahead before applying for a loan where your credit score stands.

crc price page for self financial report

How Bad Credit Score History Affect Lending Decisions.

Your credit score can be considered bad when it contains financial information unattractive to lending institutions. This usually happens if you’ve defaulted on loan repayment in the past. You’ve made several late repayments, file for bankruptcy, failed in your financial obligations, etc.

When you apply for a loan, the lender will run a background check on your loan history through the credit bureau database. The credit bureau is primarily responsible for making sure that lending financial institutions have adequate information they need to make lending decisions to customers.

Also, having a bad credit score can make securing a job a difficult thing. In some industry, like the finance, it may be difficult to secure a job as it is require you to have a good credit history to be eligible for appointment.

It could also make it hard to start your own business especially if you need to borrow from the bank to start the business. As in most cases, the lending bank will go through your credit history to determine your eligibility.

How to Get a Loan With Bad Credit Score.

No matter where you stand in the CRC credit score, it is still possible to find a lender. It may only take a while and with a higher interest rate.

Though, to maximize your chances of getting loan approval, consider checking your credit score history. I have discussed this above but important I remind you of it here.

Research the market for a possible lender. You’re most likely to secure a personal loan. This is because of the risk factors. Most personal loan lenders often take the risk of lending loan facilities to individuals with not-so-good credit score history.

Consider the following financial institutions below for a possible positive loan decisions.

Microfinance Bank.

Another good option to consider is the microfinance banks. The microfinance banks often lend money to an individual with a fair credit score history but these loans usually come with a higher interest rate.

Though it may require that you provide a guarantor, valid means of identification and passport photograph. These become necessary considering the risk factors you’re carrying.

But most importantly, it is important you work on improving your credit score over time. This will put you in a better position to apply for a loan in the future.

Family and Friends.

From a relationship standing-point, this is not so good to go with. It may ruin your relationship with friends or family if you default on paying back. But still, it makes a lot of sense if the money is urgent and here is your only option.

Loans from family and friends is better in the sense that you’re save from paying interest rate and a break on the terms and conditions that comes from financial institutions. If you’re lucky to have a good person to lend you, you may have the opportunity to repay at your convenient time.

Cooperative society.

In my opinion, this is your best shot. If you have been part of a financial cooperative society and in good relationship with the moderators, you can arrainge for a loan at a better interest rate.

The good side of this type of loan is that you repay weekly and with very less aggressive means of loan collections. Cooperative society are far better than microfinance banks, base on my experience.

Matters are sort out amicably and you can quickly grow your business with cooperative society.

Loan with Collateral (Secured Loan).

If you have assets worthy of collateral, consider applying for loan with collateral. This will encourage the lender to grant your loan application.

With your collateral at the lender’s custody, he rests assured and feels secured that even if you default on paying back, he can sell the collateral to recover part of the money.

This is a secured loan and it is your best shot when you’re carrying a bad credit score. With secured loans, you have access to higher loan amount, better interest rate and favorable term and conditions.


Having a bad credit score is not encouraging and should be avoided at all costs. But life has its’ own way and situation can turn around suddenly that makes life just difficult.

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