why is it so hard to get a loan?

Question

why is it so hard to get a loan when you have low credit score below 500!!! It shouldnt be that hard, I mean there are people out there that really want to help there credit and getting a loan and consolidating everything is the only option yet no one wants to give a loan so they can try to get there life back in order and not lose there house!!!!!! has anyone out there had any luck with any companys that will work with low scores and help homeowners.. please let me know thanks

Answer 1

Because with a low credit score there is no history that suggests you are a good risk to lend money to and get payment back from.

Answer 2

Giving loans is not a business created to help you rebuild or build your credit history. It's a business to generate profit on the lending of money. Those with low credit scores have shown a poor history of honoring the loan contract in full. Consequently, lenders shy away from them for the more reliable borrowers with higher credit scores.

You have given indication in your question that you are already in financial difficulty by stating that you want to save your house. Think about it. If you can't make the payments on your house NOW, how will you pay back the lender of the NEW loan ?

Answer 3

If your score is below 500 you have done something terrible with your credit. Scores just dont get into the 400's because a few late payments or a lack history. You have to show a total disregard for credit use to get your score that low. And therefore the banks dont want to take a chance on you.. and I really dont blame them. Under 500 is awful. Work on getting that score up near 600.

Answer 4

A 500 credit score means you are a high-risk borrower. The market is shaken up right now, rates are going up and lenders are afraid to lose too much money.

Your solution is :

- to find some money in a short-term (anything is good : sell your car, rent a room in your house, sell goods you own, cut cable tv, cut cell phone if not for work, find a cheap holidays plan, etc.)

- improve your credit score

- try to refinance or consolidate in a few months

Good luck !

Local mortgage brokers/planners and family finance counselors may help too.

Answer 5

It is hard for you to get a loan because with a FICO score below 500, it is obvious you have a history of not paying your bills or paying them on time. Since you are a homeowner, maybe you can take the equity in your house and apply it to paying off some of you debt; therefore, increasing your FICO score over time. Once your score is high enough (maybe over 600), you can possibly apply for loans then.

Answer 6

it is hard because the risk of the lender is that they lose their money. Good lenders pay attention to this so they can keep their rates low for their customers, the higher number of default lows raises the risk and reduces the amount they can lend to people who "Can pay".

You may want to contact the "Consumer Credit Agency" in your area, they maybe able to help you in dealing with your problem.

Answer 7

try a website like prosper.com it's where people help other's get loans. Basically individuals put up there own money as an investment in you, and earn a reasonable rate of return while allowing you to get a loan.