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Bad Credit Mortgage Loans with Guaranteed Approval (2020) 🏡



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Considering investing in real estate? Feeling deterred by your bad credit? Thinking it might be a good time because of lower interest rates…or is the market about to crash?

After the Federal Government made cuts to interest rates, more people are considering investing in real estate, putting pressure on lenders. The uncertainty of COVID-19 and how it will impact the housing market has resulted in less houses on the market, as sellers pull back.

Lower interest rates driving demand, coupled with rising home prices due to less houses on the market, has caused some confusion among people considering buying a home or investing in property.

In reality, deciding whether to invest or not depends on where you reside, and how long the pandemic will last. However, if you find a home that feels like the right fit for you, have a stable job, and get low rates on your financing, then buying a home could just be the wisest thing to do – even now.

Having a bad credit score shouldn’t deter you either: there are lenders out there with manageable terms and lower rates. You just need to know which ones to look at.

In this review, we list the top five lenders for bad credit mortgage loans for guaranteed approval. We also go through the best loans to consider if you have bad credit, along with the best thing to do before you take out a mortgage.

Bad Credit Mortgage Loans With Guaranteed Approval

After examining more than 18 data points, our top picks are as follows:

1. FHA Rate Guide
Best Overall
2. Lending Tree
Best Rates
3. Wells Fargo Home Mortgage
Best for Low Down Payments
4. PNC Bank Mortgage
Considers Non-Traditional Credit History
5. New American Funding
Best for Customer Service

The Best Mortgage Loans for Bad Credit

1. FHA Rate Guide: Best Overall

FHA Rate Guide is out best overall lender for bad credit mortgage


  • Competitive rates 
  • Credit requirements are more lenient than competitors 
  • FHA 203(k) loan available for home improvements
  • Can qualify for a loan quite soon after bankruptcy
  • Loans are assumable


  • Not suitable for everyone
  • Will need to pay FHA mortgage insurance
  • Stricter property eligibility requirements

If you’re looking to buy a home, finding the top mortgage lenders can be difficult. It can be even more difficult when you have bad credit. But we’ve found a high contender. 

FHA Rate Guide offers an online service that connects people looking for mortgage products to some of the best lenders. Those interested can fill out a detailed application form to get access to the best loan for your personal situation. The platform is our top pick for bad credit mortgage loans for guaranteed approval.

Interest rate: Varies

Application length: 4 minutes

Reputation score: 8.5/10

Highlight: Considers non-traditional credit history

The platform’s FHA Rate Guide is especially beneficial to those looking to refinance and take out an additional loan. This guide will be instrumental in saving you both time and effort on your search for the perfect mortgage. The next question is, what is the eligibility process?

Homeowners with bad credit looking to refinance and take out home equity can utilize the FHA rate guide to get matched with the most suitable lenders for your circumstances. 

Before looking at fees, let’s go through the eligibility process. To move past the initial online application, you will need to be 18 years or older, a U.S resident, and hold the legal authority to agree to a contract.

Should you meet the eligibility criteria, you will be able to access an online application process on the website. Though the coronavirus is not expected to drive down housing prices significantly, the increased demand in housing has contributed towards more lenders going almost 100% virtual. 

Buyer consultations, for example, are virtual because for a time most sellers were not allowing showings. This means that you can expect more lenders to offer more services online.

To begin the application, you will be asked to input some detailed information surrounding your property type, property value, either the total payments remaining on your mortgage or the total down payment. You’ll also be asked for your current income, your credit score, and the amount of cash you are asking to borrow.

After that, your information will be shared with the trusted lenders before you receive an email outlining the eligible loans matching your conditions. Because of the structure of the FHA Rate Guide, the platform cannot assist with any loan applications.

They also have no say over the rates and fees charged. Mostly, the FHA exists to collect the data and send you the best mortgage options for your situation.

Of course, you can’t make your decision without knowing how much you’ll pay. So how much can you expect to pay for a bad credit mortgage loan with the FHA Rate Guide? 

Unfortunately, because the FHA Rate Guide is simply a matching service, this isn’t a straightforward answer. Due to the fact that there are so many potential lenders, loan terms will vary, and will depend on factors including where you live, how much you want to borrow, and your current credit score. 

However, you can look to the following terms as a general guideline:

  • Loan Types: Fixed-rate, VA loans, variable-rate ARM and I/O loans, and FHA loans. 
  • Loan amount: No maximum loan amount .
  • Credit score: All credit types can apply, including damaged and low credit.
  • Additional fees: Each lender will differ when it comes to fees and rates. Most companies will apply a penalty fee for late or missed payments. 
  • APR: This rate usually varies. Once you complete the online application you will receive a specific APR in your personal quote. 

Just like the fees and rates, you should also expect to be met with varying repayment terms. Typically, repayment terms for a variable rate will begin at 1-7 years, and a fixed rate will begin at about 10-40 years. This will also be influenced by your credit score, as well as the loan amount, and your zip code.

As we mentioned, the FHA Rate Guide is not a direct lender. Therefore, as downside to this loan is that the level of customer support offered is limited. In order to get in touch with the company in relation to the service, to offer feedback, or report any issues, you can fill out an online contact form on their official website.

The representatives are known for their quick responses. Unlike direct lenders, there is no FAQ’s page or informational resources offered by the FHA Rate Guide site.

2. Lending Tree: Best Rates

Lending Tree is our top pick for best rates for bad credit mortgage loans


  • Simple four step process 
  • Huge range of lending partners
  • No fee to use the service 
  • Alerts on deals and services


  • Potential for unwanted spam and information overload from partners

Founded in 1996, Lending Tree has facilitated over 55 million loans and $250 billion+ in closed loan transactions. The company helps those with bad credit get the best deal on their mortgage loans.

The platform is not a broker or a mortgage lender. Rather, it gives borrowers multiple offers from several lenders, making it easy to compare and contrast your options.

Because of the competitive nature of the platform, mortgage bankers and brokers offer lower rates and fees to compete with each other for the borrower’s business.

Interest rate: Varies

Application length: 7 minutes

Reputation score: 9.0/10

Highlight: Competition drives down prices

The Lending Tree process is fairly simple and straightforward. The first step is to submit an application through the company’s website or by calling an 800 number.

You’ll be asked some standard mortgage application questions such as your assets, any debts, gross income, how long you’ve been at your current job, and your Social Security number so that a credit report can be pulled. This information is used to choose the lenders it submits your application to.

The platform will submit applications that display a bad credit score only to lenders and brokers likely to accept the offer. Mostly, this will be about four or five companies.

Once the application is submitted, borrowers can expect to start being contacted by mortgage companies within five to 10 minutes later. Just keep in mind, the person that contacts you is paid to convince you that this is the best deal out there.

LendingTree also offers a LoanExplorer page that shows current quotes based on a few different parameters you can submit without giving your identification. This is specifically customized for mortgage loans.

The lending terms vary significantly. Again, this depends on your income, credit score, and amount you are looking to borrow.

Though, those with bad credit are likely to get a guaranteed approval. Generally, the loan range starts at about three years.

The company advertises 5/1 adjustable rate mortgages beginning at 2.97% APRs, but it could go as high as 29.9%. Keep in mind, Lending Tree might not be permitted in some states.

There are an expansive range of funding sources, from mortgage lending companies to banks to bids from lenders that could be individual lenders, partnerships or small companies.

LendingTree has had some complaints from consumers about unwanted spam and too many phone calls from potential lenders. Though these calls are not directly from LendingTree, they are from the funders, this could be considered a downfall to the platform.

When agreeing to LendingTree’s terms of service, you are agreeing to binding arbitration to resolving disputes through LendingTree. In general, LendingTree does not accept any responsibility for the lenders and advertisements displayed on its website.

3. Wells Fargo Home Mortgage: Best for Low Down Payments

Wells Fargo
Well Fargo offers competitive low down payments


  • Up to date rates posted for loan products 
  • Offers several conveniences online, including process and application updates
  • Wide selection of products and loan types


  • New applications for home equity lines of credit have been suspended as a result of Covid-19
  • Government scandals have damaged consumer trust

Wells Fargo generally needs no introduction. It is a multinational financial services company, and one of the biggest lenders in the United States. Borrowers can access a selection of purchase and refinancing mortgage products, not to mention home equity lines of credit (HELOCs).

Easy to OwnSM programs give options to those with bad credit, limited credit history, and on a lower income. The company also offers low down payments for those who may be a bit tight on cash as a result of the current Covid-19 pandemic.

Interest rate: 4.125%

Application length: 6 minutes

Reputation score: 8/10

Highlight: Better low-down payments

Wells Fargo publishes a list of its current mortgage rates which is updated on a daily basis. The company offers highly competitive rates for those with strong credit but rates are still reasonable for those looking for a mortgage with bad credit. If you have bad credit, note that the rates published on the Well Fargo website typically assume a top-tier FICO Score (740+) as well as a 20% down payment.

As one of the biggest mortgage lenders in the U.S, Wells Fargo offers a wide variety of options. For purchases, the company offers fixed-rate loans with 30, 20, and 15 years terms. 5/1 and 7/1 ARMs, jumbo loans with adjustable or fixed rates, VA mortgages, as well as FHA and USDA loans.

If you are struggling to improve your credit score, the bank offers a few different refinance loan structures, and HELOCs with the option between a variable and fixed rate. 

Wells Fargo has a good variety of educational articles and videos that can help guide you through your mortgage journey. Not quite sure what the difference is between interest rates and APRs?

You can watch a short, easy-to-follow video explaining. Other videos offer explanations of determining your price range, down payments, the mortgage process itself, and the difference between pre-qualification and pre-approval, to name a few.

While most banks offering mortgages have HELOCs, the Wells Fargo Home Mortgage is a bit different. The company’s HELOCs start off as a variable-rate credit line (which is pretty standard across the industry), then borrowers are given the option to convert part or all of their balance into a fixed-rate advance with a set interest rate for a one-20 year term.

In addition to offering all the typical ways to buy a home with less than 5% down including FHA, USDA, and VA mortgages, Wells Fargo has its own yourFirst Mortgage loan. 

The yourFirst Mortgage loan is a fixed-rate mortgage with the requirement of a 3% down payment. Unlike other programs, like USDA loans, the yourFirst Mortgage loan does not require lenders to have a maximum income limitation. And despite the names, there’s also no requirement for applicants to be a first-time homebuyer to take advantage.

Unlike some lenders which only offer its services in certain states, Wells Fargo’s huge network of around 5,400 branches across the U.S makes this bank highly accessible if you want guaranteed approval for a mortgage loan with bad credit.

Last but certainly not least, Well Fargo offers customers the flexibility needed to feel comfortable during times when our financial situation is so uncertain.

Wells Fargo offers updated interest rates daily, covering all of the APRs, and loan terms, which reflect the overall cost of borrowing.

4. PNC Bank Mortgage: Considers Non-Traditional Credit History

PNC Bank Mortgage offers informative and helpful online tools


  • Updates mortgage rates on the website 
  • Online application for mortgage pre-approval
  • Several affordable loans offered including, FHA, USDA, VA, and a PNC community loan.


  • Unable to complete application entirely online
  • No renovation mortgages offered 
  • In-person service is unavailable in some states

PNC Bank Mortgage offers diverse loan products and competitive terms for bad credit mortgage loans, including some PMI options to take your pick from.

PNC is another ideal option for borrowers looking for a low down payment mortgage, including low to moderate income earners who might fit the requirements for a PNC cash grant. Also, PNC’s pre-approval comes with a firm commitment to lend, for all borrowers.

Interest rate: Varies

Application length: 10-15 minutes

Reputation score: 9/10

Key features: Online tools for borrowers

PNC offers a varied selection of loans that should appeal to most borrowers. PNC offers the most sought after government backed mortgages, including FHA loans (Federal Housing Administration), USDA loans (U.S Department of Agriculture). Borrowers can access up to $5 million with these loans.

The company offers a few different loan programs that assist borrowers in attaining homeownership without a huge cash outlay.

Anyone finding it difficult to manage finances at the moment, avoiding private mortgage insurance (PMI) could apply for a mortgage of 80% of the value of the home, and a HELOC for 9.9% of the value of the home. Then, the down payment requirement is only 10.1%, with no addition of a PMI.

PNC offers FHA loans, which are loans that the bank made and the Federal Housing Administration (FHA) guarantees. These require a down payment of 3.5%. In addition, a PNC community loan. This is a loan program offered by PNC only, with a down payment requirement of 3%, and no PMI.

Typically, lower down payments are attached to higher mortgage interest rates than conventional loans which are typically attached to a 20% downpayment.

Medical interns, fellows, residents, and doctors who have completed their residency in the last five years can access a special mortgage. Cash grants, of $1,500, towards the down payment are also available, based on income limits, and where you reside.

With more Americans considering buying a home as a result of Covid-19, it has arguably caused a move away from compacted, urban areas, towards more suburban, less-populated cities, where they can buy more with their money. If this is something that is viable for you, then it would be good to consider as a money efficient option.

The pre-approval process can be done from the comfort of your home, and its online tools are informative, educational, and all geared towards first time buyers looking to learn more about home loans. Tools include interactive calculators, a Home Insight Planner, and an Application Tracker.

5. New American Funding: Best for Customer Service

New American Funding has an excellent customer satisfaction rating


  • Several mortgage options
  • App available to manage your mortgage
  • Variety of educational resources provided, like home buyer guides and calculators
  • More conventional loans come with a 14 business day close guarantee


  • Unavailable in Hawaii and New York

Diverse loan terms and products on top of low rates, are a tough combo to come by. Those considering a mortgage can feel more at ease knowing there is a guaranteed fast closing.

Interest rate: Varies

Application length: 10 minutes

Reputation score: 8.5/10

Key features: High customer satisfaction

In 2018, New American Funding was the 16th biggest mortgage lender by loan volume in the U.S, making $10.1 billion in loans. With a humble beginning by a husband and wife team in 2003, the company now funds mortgages throughout the country.

New American Funding is best suited to self-employed borrowers, since it offers non-QM mortgages that can’t be gotten from all lenders.

Another highlight of the company is its focus on helping people in underserved communities become the proud new owners of a home.

In addition to all the typical loan offerings you come to know on your mortgage journey, New American Funding offers several other special mortgage loans. These include:

  • Energy-efficient mortgages to finance certain home improvements.
  • Non-qualified mortgages, generally for self-employed borrowers and those that do not qualify based on tax returns.
  • Reverse mortgages for homeowners with substantial equity who want to receive a monthly payment. These aren’t right for everyone though, and should be carefully researched and considered.

New American Funding guarantees that it will close the loan within 14 days or pay $250 off their closing costs. This is a significantly shorter period than the industry standard of 40 days. However, it is only applicable to purchase loans, and not brokered loans.

First time home buyers will be happy to know that New American Funding will connect you to resources that will help make the process of owning a home easier. To secure a home without needing to put any, or too much, money down, the company will advise you about the payment assistance and grant programs that you may be able to access in your region.

New American Funding really prioritizes customer satisfaction and its customer service team, offering services in both English and Spanish. Lastly, you will find that its website is clear, and you will find the answers to many of your questions. It also offers helpful information on VA loans, FHA loans, USDA loans, a mortgage calculator and cash-out refis.

How to Secure a Mortgage With Bad Credit

When you’re ready, buying your first house can be a smart investment. You can also end up in a financial disaster if you choose the wrong mortgage.

Right now, the housing market is red hot. In June, home sales surged almost 21% – the biggest monthly gain on record.

So it makes sense that you understand everything you need to know before choosing a bad credit mortgage. Below, we discuss how the coronavirus impacts mortgages, different loans to consider, and whether you can even buy a house with bad credit.

How Coronavirus Impacts Loan Rates

The recent cuts to interest rates have affected mortgages differently. It has also created a spike in demand which has put pressure on lenders. As a result, some government-back mortgages like FHA loans have higher rates, and lenders are tightening their standards in the midst of economic uncertainty.

Overall, there is expected to be an increase in lending during COVID-19 due to the lower rates.

How the Federal Rate Impacts Mortgages

The federal funds rate affects short-term loans, such as adjustable-rate mortgages, which unlike fixed-rate mortgages, have interest rates that float up and down, and credit card debt. Long term fixed rate mortgages are generally not affected by the fed funds rate.

What to Consider If You’re Shopping for a Mortgage

Buying a home during the Covid-19 pandemic can be done under the right circumstances. Starting with the basics, if you like the home, have a stable income, and find a bad credit mortgage loan with manageable rates, considering buying the property would not be a bad move. The same goes for those looking to invest in property.

Though it’s difficult to time the real estate market. Where it was once thought that investing in property was a safe bet, we have already seen the real estate market suffer two huge shocks. The first, the 2008 financial crisis, and the second we are witnessing, and living through, now.

Without a job, people will not be able to repay any debts. That said, people did not have the safety of government aid programs during the Great Recession of 2008, 

Therefore, the best we can do is outline the basics of property buying:

  1. Ask yourself how long you will stay in your new home for. If you think it will be less than five years, try to find one that you can build value on.
  2. Have a good understanding of your budget. Especially now, don’t spend beyond your means and hope that it works out. Prices will likely decline in the short run, so be aware of overspending.
  3. Find somewhere that meets your needs. Buy something that meets your basics needs now, and invest in improvements over time.
  4. Look for a suitable neighbourhood for you. Look for somewhere with a good school district, as this will likely hold the value of the home.
  5. Make sure that the terms of your mortgage works for you now.

Can I Get Approved for a Home Loan With a 500 Credit Score?

One of the first things a lender will do when you apply for a mortgage is check your credit score. This can range from 300 – 850 for base scores and from 250 – 900 for industry specific score.

The better your credit score, the more chance you have of qualifying for better rates. This is typically in the range of 700 or higher. If your credit score falls below this, you will find it more difficult to get a mortgage loan, and you’ll probably have to pay unfair rates for the ones you do qualify for.

Though, if your score drops below 620, you could find yourself in the difficult position. To prevent this from happening, consider using a top credit monitoring service. This will safeguard your credit and let you know of any suspicious activity.

While it is possible to get a home loan with a score in the 600s, the CFPB warns that these loans tend to be attached to higher interest rates which could put you at risk of default. This is because if you are paying higher interest rates, then it will be more difficult to repay. 
For this reason, it makes sense to look into some of the leading credit repair companies and try to improve your credit before you buy a house.

Can I Get a Mortgage with Bad Credit?

While getting a loan with bad credit can be difficult, some lenders are willing to work with borrowers with lower scores. 

Basically, a subprime mortgage is a loan with higher interest rates than conventional loans, accessible to borrowers with better credit. Unfortunately, subprime loans not only have increased rates, but there are also other features that make them risky loans.

These loans can start off with a lower rate than a fixed rate mortgage but then the interest can increase once the introductory term is over.

What Types of Home Loans Are Available for Those With Bad Credit?

While there are bad credit loan options out there for other purposes, bad credit mortgage loans can be more tricky to work out. To start, we suggest you avoid a subprime loan because of its risks. Here are the details of some viable alternatives if you are looking for a mortgage with bad credit:

  1. FHA Loans: The Federal Housing Administration is set up to help potential homebuyers secure mortgages even without the best credit score. To qualify for an FHA loan you will only need a credit score of 580, which will require a down payment of 3.5% of the purchase price of your home.
  2. VA loans: VA loans are available to active-duty military members and veterans and are guaranteed by the Department of Veterans Affairs. Your credit score will typically need to be 620 or higher to qualify, but some lenders will accept a credit score of 580. In some cases, VA loans require a 0% down payment.
  3. USDA loans: The aim of USDA loans is to assist those on a lower-income who want to buy homes in rural areas. This loan typically requires a credit score of 640 or higher but again, some lenders will accept lower scores. You may also be eligible for a 0% down payment with this loan.
  4. Fannie Mae HomeReady loans: These are specifically created to assist lower-income borrowers. You will need to have a credit score of 620 or more to qualify for this, along with a downpayment of only 3%, in some cases.
  5. Freddie Mac Home Possible® loans: The aim of these is to create more accessible loans for homebuyers with moderate incomes. You may be eligible for a down payment as little as 3%.

Bad Credit Mortgage Loans: The FHA Loan

If you have a bad credit score as a result of certain events in your life then qualifying for a conventional loan can be extremely difficult.

Other Government loans like the USDA or VA are less forgiving than FHA loans. For these, lenders generally require a FICO score of 620. Plus, you would need to live in a rural area or be a veteran.

If you are a first time home buyer and have bad credit combined with a low down payment, a low credit score FHA loan may be the best option for you. It also wouldn’t hurt checking out if there’s anything you can get removed from your credit report. This could make a huge difference to your financial future.

Can I Get an FHA Loan With Bad Credit?

In most cases, lenders require a minimum score of 620 for conventional loans, whereas requirements for FHA loans are looser. Homebuyers with a score as low as 500 could be eligible to access an FHA loan.

What Credit Score Do I Need for an FHA Loan?

Rising housing costs and crippling student debt means more people are looking for loans with low-down payment requirements.

To be considered for an FHA loan you will need to meet these minimum requirements:

  • Minimum FICO score requirement of 500
  • Credit score of 580+ will qualify you for a 3.5% down payment.
  • Credit score of 500 to 579 will qualify you for a 10%+ down payment.

What is the Minimum Credit Score for Down Payment Assistance?

As outlined above, the minimum credit score for down payment assistance is 580 to be eligible for a 3.5% down payment, and a score of 500 or more to qualify for a 10% down payment.

Do All Banks Do FHA Loans?

In order to offer an FHA-insured home loan, a mortgage lender must be approved by the federal agency managing the program. Because this loan is highly sought after, most banks offer FHA loans.

What Makes a House FHA Approved?

Of course, the saying goes nothing in life is guaranteed – except death and taxes! However, if you meet the following requirements then your FHA mortgage is virtually guaranteed.

Before you look into applying for an FHA loan, consider doing some research on how debt consolidation works. If you have numerous debts, consolidating your debts could increase your chances of getting better rates.

  • You meet the down payment and minimum credit score requirement
  • You have had income for the last two years.
  • You have sufficient income to meet the loan repayments.
  • You haven’t been bankrupt within the past two years, not have you had a foreclosure in the past three years.
  • The home is to be your main residence and is in good condition. 

If you meet these requirements, your bad credit FHA mortgage should have guaranteed approval.

What Will Fail an FHA Appraisal?

The structure of the property must be in a livable condition. This means that there must be no dampness, leakage, structural damage, termite damage, or decay or the property could fail inspection. In this case, the house must be repaired before the FHA loan can be approved.

What Is the Downside of a FHA Loan?

Traditionally, a key benefit of an FHA loan is the lower interest rates. However, this isn’t always true for those with bad credit scores. If you have a low credit score your FHA rate will be a little more than someone with a higher credit score.

What Mortgage Company Works With Bad Credit?

When you’re shopping for a mortgage, regardless of your credit score, you should compare rates and terms from various lenders. Looking at some of the top debt consolidation loans also could also help you get better rates. This is especially true if you have bad credit that can make it harder to find manageable terms. 

Consider lenders like:

  • National and community banks
  • Mortgage companies
  • Credit unions

Who is the Best Mortgage Lender for Bad Credit?

To help you find a mortgage lender offering better terms, we recommend consulting our list of the top bad credit mortgage loans for guaranteed approval, and doing some further research to find the best one for your situation.

Can I Get Preapproved for a Mortgage With Bad Credit?

To get pre-approved for a bad credit mortgage loan, you will need to fill out the lender’s mortgage application process. The lender will review the information offers and give you an estimate of the amount of the loan they can offer.

What is Considered a Good FICO Score?

Learning how to comprehend your credit report is crucial. FICO Scores are used by many lenders, and generally range from 300 to 850. A good FICO score is considered to be 670 or higher. A score above 800 is considered to be exceptional.

Can I Buy a House With Bad Credit and No Money Down?

As you’ve just seen, Government backed Va and USDA loans can enable you to buy a home with bad credit and $0 money down.

How Long Do Lenders Look at Positive Credit History?

Typically, lenders will look for about 12-18 months of positive history. This includes no late or missed payments, and modest balances.

What Credit Score Do You Need to Refinance Your Mortgage?

To refinance your mortgage, credit requirements vary from lender to lender, and depend on the mortgage type. Generally though, you’ll need a minimum credit score of 620 for a conventional mortgage.

What is a Good Credit Score for a First Time Home Buyer?

First time home buyers usually need to have a credit score of 640 to qualify for homebuyer assistance. That said, chances are you might need a score of up to 680 to qualify for a conventional mortgage. It could be a good idea to look into credit repair companies near you. 

A good credit repair company will look after any errors on your report for you so you don’t have to go through the time consuming legalwork yourself.

How Much is a Payment on a $200,000 House?

For example, if you borrow $200,000 at 5% with a loan range of 30 years, you will pay $1,073.64 per month. With fixed-rate mortgages, this will stay the same over the loan term.

Will Adding My Spouse as an Authorized User Help His/Her Credit?

Adding your spouse as an authorized user could help their credit, and it will not harm yours. Your credit score is a reflection of your credit history, so your score won’t include your partners.

How Can I Quickly Raise My Credit Score?

Here are some ways you can quickly raise your credit score:

  1. You can check your credit report with Experian. Your credit score is based on the information contained in your credit report.
  2. Create a budget and stick to it.
  3. Make sure all your payments are on time and paid in full.
  4. Put some of your wage towards an emergency fund.
  5. Use the UltraFICO and Experian Boost programs. 
  6. Be careful about closing credit cards because this can lower your credit score by causing your available credit to drop and thus, reducing your borrowing power, and more importantly, your credit-utilization ratio.
  7. Don’t wait, the quicker you begin improving your finances the more likely you are to improve your credit score.

The Bottom Line

Qualifying for a bad credit mortgage is not impossible. You’ll need to consider your options carefully and might want to look a bit deeper into FHA loans to get the best rates.

Before considering a bad credit mortgage loan though, consider working towards improving your credit score. Better credit score will help you find a better loan, with more manageable loan terms and lower interest rates.

You might also want to look into debt consolidation loans for bad credit to help you streamline your payments, potentially pay a lower interest, and in turn improve your credit. All of which will give you a better chance of qualifying for a conventional mortgage loan.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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Bad Credit

What is a Credit Builder Loan and Where Do I Get One?



Your credit score plays an important role in your financial life. If you have good credit you can qualify for loans and borrow money at lower interest rates. If you don’t have a credit score or have poor credit, it can be hard to get loans and you’ll be forced to pay higher rates when you do qualify.

Building credit can be like a chicken and egg problem. If you have no credit or bad credit, you’ll have trouble getting a loan. At the same time, you need to get a loan so you have an opportunity to build credit.


What Is a Credit Builder Loan?

A credit builder loan is a special type of loan designed to help people who have poor or no credit improve their credit score.

In many ways, credit builder loans are less like loans and more like forced savings plans. When you get a credit builder loan, the lender places the money in a bank account that you can’t access. You then start receiving a monthly bill for the loan. As you make those payments, the lender reports that information to the credit bureaus, helping you build up a payment history. This improves your credit score.

Once you finish the payment plan, the lender will release the bank account to you and stop sending bills.

In the end, you’ll wind up with slightly less money than you paid overall, due to fees and interest charges. For example, let’s say you get a credit builder loan for $1,000, the lender may make you make a monthly payment of $90 each month for a year. After the year ends, you’ll get the $1,000 from the lender, but may pay $1,080 overall.

Why Get a Credit Builder Loan?

The main reason to get a credit builder loan is right in the name: They help you build your credit. If you don’t have any credit history or if you’ve damaged your credit by missing payments, it’s much easier to qualify for a credit builder loan than a traditional loan from a lender.

The companies offering credit builder loans take on almost no risk because they don’t give you the money until you’ve finished paying the loan, so they’re willing to approve people who have severely damaged credit.

Credit builder loans will help you build your credit history if you make your monthly payments, but you do have to pay fees and interest to do so. There are other ways to build credit that don’t require paying any money. For example, if you get a fee-free credit card and pay your balance in full each month, you’ll build credit without paying any interest or fees.

This makes credit builder loans best for people who have tried and failed to qualify for other loans and credit cards.

There is also some value in the forced savings provided by credit builder loans, but the interest and fees eat away at that savings. If saving is your goal, it’s best to use a different strategy to help you save, but if you want to save and build credit at the same time, a credit builder loan might be worth using.

Where to Find Credit Builder Loans?

There are many companies that offer credit builder loans. Each lender offers different loan terms, fees, and interest rates.

One of the top credit builder loan providers is Self. The company offers credit builder loans with payment plans as low as $25 per month, making it easy for almost anyone to afford a credit builder loan.

With Self, you can also qualify for a Visa credit card after you’ve made at least 3 payments on your credit builder loan and made $100 of progress toward paying off the loan. You can set your own credit limit, up toward the total amount of progress you’ve made on the loan.

The card doesn’t have any additional upfront costs and can help you gain experience with using a credit card. It can also help you build your credit by giving you another account to make payments on, providing you with more opportunities to build a good payment history.

Visit Self or read the full Self Review

What to Look for?

When you’re looking for credit builder loans, there are a few factors to consider.

The first thing to think about is the monthly payment. The point of a credit builder loan is to show the credit bureaus that you can make regular payments on your debts, which will help build your credit score. If a lender’s minimum payment is more than you can afford each month, you won’t be able to build your credit with that lender’s credit builder loan.

It’s also important to think about the cost of the loan. Credit builder loans often come with stiff fees and you also have to pay interest on the money you’ve borrowed, even if you don’t get access to it until you pay the loan off.

The fewer fees and the less interest you have to pay, the better. You should look very carefully at each lender’s fee structure to choose the best deal.

Finally, take some time to see how easy it is to qualify. While credit builder loans are targeted at people with bad credit, some lenders will still check your credit history and might deny your application.

If you have very bad credit, you might want to look for a lender that advertises credit builder loans with no credit check.

Alternatives to a Credit Builder Loan

Credit builder loans can be a good way to build credit for some people, but they come with interest charges and fees. There are other ways you can build credit worth considering. Some of them won’t cost any money, which may make them a better choice than a credit builder loan.

Secured Credit Cards

A secured credit card is a special type of credit card that is much easier to qualify for than a typical card.

With a secured card, you have to provide a security deposit when you open the account. The credit limit of your card will usually be equal to the deposit you provide. For example, if you want a $200 credit limit, you’ll have to give the card issuer $200 as collateral.

Because you give the lender cash to secure the card, it’s much easier to qualify for a secured credit card. The lender assumes almost no risk. Once you get the card, it works like any other credit card. You can use it to spend up to your credit limit and you’ll get a bill each month. If you pay the bill on time, you can build credit.

Many secured cards charge high interest rates and have hefty fees, but there are some fee-free options available. One great secured card is the Discover it Secured Credit Card, which has no annual fee and offers cash back rewards.

Become an Authorized User

Most credit card issuers let cardholders add other people as authorized users on their accounts. Authorized users get their own cards and can use them to spend money just like the main cardholder.

Some issuers will report account information to the credit reports of both the main cardholder and any authorized users. If you know someone that is willing to make you an authorized user on their credit card account, this may help you build your credit so you can qualify for a card of your own.

Not every issuer will report information to authorized users’ credit reports. It’s also worth keeping in mind that if you become an authorized user on a card and the cardholder stops making payments or racks up a huge balance, that will show up on your report as well, damaging your credit further. That can make this strategy risky.

Personal Loans with a Cosigner

Personal loans are highly flexible loans that you can use for almost any reason. If you need to borrow money, you can try to find someone who is willing to cosign on the loan. Having a cosigner can make it easier to qualify, even if you have poor credit, giving you a chance to build your credit score.

When someone cosigns on a loan, they’re promising to take responsibility for your debt if you stop making payments. Lenders will look at both your credit and your cosigner’s credit when you apply, so having a cosigner with strong credit can help you get the loan or reduce the interest rate of the loan.

Keep in mind that your cosigner is putting themselves at risk by cosigning on a loan. It’s even more important that you make your payments every month. If you don’t, your cosigner will have to pick up the slack.

Personal Loans without a Cosigner

Even if you have poor credit, you may be able to qualify for a personal loan designed for people that don’t have strong credit. Just keep in mind that you’ll have to pay higher fees and interest rates to compensate for your poor credit score.

If you’re looking for a personal loan and have poor credit, shopping around for the best deal becomes even more important. You can use a loan comparison site, like Fiona, to get quotes from multiple lenders so you can find the cheapest loan.

Related: Best Emergency Loans for Bad Credit

What Is the Difference Between a Credit-Builder Loan and a Personal Loan?

A personal loan is a type of loan that you can get for almost any reason, such as consolidating debts, starting a home improvement project, paying an unexpected bill, or even going on vacation. They’re offered by many lenders and banks.

A credit builder loan is less a loan and more a forced saving plan. When you get a credit builder loan, the lender doesn’t actually give you any money. Instead, it places the amount you’re borrowing in an account you can’t access. Once you finish paying the loan, the lender releases the money in that account to you.

Credit builder loans tend to be much easier to qualify for than personal loans because the lender doesn’t have to take on much risk. They’re mostly used by people who want to build or rebuild their credit score.

On the other hand, personal loans are less popular for building credit and more useful for providing funding when borrowers need cash to cover an expense.

Related: Best Prepaid Credit Cards That Build Credit

Pros and Cons of a Credit Builder Loan

Before applying for a credit builder loan, consider these pros and cons.


  • Easy to qualify for
  • Helps you build savings
  • Payments are usually small
  • Helps you build payment history


  • Not really a loan
  • Fees and interest rates can be high
  • There are cheaper alternatives to build credit


These are some of the most frequently asked questions about credit builder loans.

Like most loans, it is possible to repay a credit builder loan ahead of schedule, but there are a few downsides to consider. One is that many lenders add an early repayment fee to their loans, so you’ll have to pay that fee if you want to get out of the credit builder loan. The other is that repaying the loan early somewhat defeats the purpose. Each monthly payment you make toward the loan helps you build your credit. If you pay the loan off early, you’ll make fewer monthly payments, which means less improvement in your credit.

Missing a payment on a credit builder loan is like missing a payment on any loan. You’ll likely owe a late fee and it will damage your credit. This is one of the reasons it’s important to make sure you can afford the monthly payment before signing up for a credit builder loan. If you can’t make your payments, the loan will wind up damaging your credit instead of helping it.

Final Thoughts

Credit builder loans can be a good way to build or rebuild your credit, but they’re not your only option. They often involve paying fees and interest, so you should search around for the best deal or look for cheaper (or free) alternatives, such as secured credit cards.

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How to lower your credit card interest rate and save money



Why pay high interest on your credit cards when you can simply bargain a lower rate? These tips can help you save big money on your bill.

CHARLOTTE, N.C. — A lot of people have struggled to pay their bills during the COVID-19 pandemic and many have turned to credit cards so they can kick the can down the road. Now the time has come to pay it down and some of the bills are eye-popping. 

Did you know you can bargain that interest rate down and save quite a bit of money?

You could ask for a lower rate, but according to a new study, you can bargain down 10 percentage points. So, if your interest rate is 24%, it could mean paying 14% instead. That’s still high but it’s a lot better than 24% interest. 

These numbers are staggering and can be a bit overwhelming. Americans have an average credit card balance of $5,300, totaling $807 billion across 506 million credit card accounts. Why are these numbers important? Because they want to keep you spending, which means you have leverage to bargain.

“It is absolutely possible to negotiate your rate down. In fact, your chances of doing so are better than you think they are. Close to 80% surveyed said they did just that,” Matt Schultz, an industry expert with LendingTree, said. “You can save serious money, especially if your balance is bigger.”

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You have to try, and you have to keep trying, even if the lender says no. Take it higher to a manager and keep pushing. Drops of 10% are possible and that could save you hundreds, or maybe even thousands, of dollars. 

RELATED: VERIFY: Can your stimulus check be seized by banks or private debt collectors?

“So, a lot of people have bad credit, some are thankful to have it at all. Is it possible for them too? Yes, absolutely it’s possible,” Schultz said. “Credit card companies are willing to talk with you because they want to keep your business. It benefits them to lower your rate to keep their card in your wallet.”

Paying down debt is liberating. Less debt is more buying power but you must advocate for yourself. If you don’t, the card companies are just as happy to take your money at the higher rate. 

LendingTree offers these suggestions if you plan to ask for a lower rate: 

How to ask for a lower APR

Before you make the call, come armed with ammunition in the form of other offers you’ve seen at a site like or that you may have received in your snail mail. Take that offer and use it to frame the conversation: 

“I’ve been a good customer of yours for a long time and I like my card. However, the APR is 25% and I’ve just been offered one with a 19% APR. Would you be able to match it?” 

As survey data shows, they’ll likely be willing to work with you, at least to some degree.

RELATED: ‘ I was very grateful’ | WCNC Charlotte breaks through red tape to help woman get money she was owed

How to ask for a waived annual fee

Before you make the call, think about what you will accept. If you ask for a fee to be waived altogether and they only offer to reduce it, is that good enough? What if they offer you extra rewards points or miles or make some other counteroffer instead of a reduced fee? And perhaps most important, what if they say no? 

As with many negotiations, you have more leverage if you’re willing to walk away, so that could be an option. However, you shouldn’t make that threat unless you’re willing to follow through with it, and you shouldn’t follow through with it unless you’ve thought about what that would mean for your credit.

How to ask for a waived late fee

Just pick up the phone and be polite. If you’re a long-time customer with good credit and this is your first offense, the odds are in your favor. In fact, some card issuers will even waive a first late fee as a matter of policy. If you’ve been late multiple times in the recent past, however, your chances probably aren’t as good. Even so, it never hurts to ask.

How to ask for a higher credit limit

Start with a number in mind based on your current limit. The average increase reported in our survey was about $1,500, but your situation will vary. If your current limit is $500, a $1,500 bump might be asking too much. However, if your current limit is $5,000, that request might be just fine. 

Think about why you’re asking for the increase — for some extra spending power or to help your credit score — and then decide what to ask for. Just remember that it’s always better to start a negotiation by asking for a little too much. That way, when you negotiate, you can give a little bit and still get what you want.

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Can A Moving Loan Help Your Relocation? Find Out Here – Forbes Advisor



Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.

Whether you’re relocating to another city or state, moving can be expensive. You might need money to pay for a moving van or movers, new furniture or your security deposit. If you don’t have money on hand to cover those expenses, a moving loan can help you fill in the gap.

Before you take out a relocation loan, learn what they are and how to compare your options to understand if it’s a good choice for your situation.

What Is a Moving Loan?

A moving loan—also referred to as a relocation loan—is an unsecured personal loan you can use to help cover your moving expenses. Unsecured loans don’t require you to use a personal asset to secure the loan. Because the loan is unsecured, lenders base your eligibility on factors like your credit score, income and debt-to-income (DTI) ratio. Like with other types of personal loans, you’ll have to repay your loan through fixed monthly installments.

When Should You Get a Moving Loan?

Although the answer varies based on your financial circumstances, it may make sense to get a moving loan if you can secure a good interest rate and can afford to repay the loan as promised. However, if you believe it might be hard for you to repay the loan, then it’s probably a good idea to avoid taking one out. Falling behind on payments can damage your credit score, making it harder for you to qualify for future loans.

How to Get a Moving Loan

  1. Search for lenders: To find lenders that offer relocation loans, search for the best personal loans online. A good place to start might be a lender comparison website. While there, carefully review the terms, minimum credit score requirements, fees and annual percentage range (APR) range of each lender. In addition, you can check with your local bank or credit union to see if it offers personal loans for moving.
  2. Prequalify with multiple lenders: Once you narrow down your list of the best lenders, prequalify with each one of them (if available). This allows you to see what terms and APR you might receive if approved. Make sure the lender does a soft credit check to protect your credit score from any pitfalls.
  3. Determine the amount you need to borrow: Estimate your moving or relocation expenses to see how large of a loan you need to take out. Different lenders have different minimum loan amounts. Also, some states have rules about the minimum amount you can borrow, which may affect the size of your loan.
  4. Apply for your moving loan: After you select the lender that matches your needs, complete the application process. Prepare to provide the lender with personal information, such as your income, date of birth and Social Security number (SSN). Some lenders will require you to provide W2’s, pay stubs or bank statements to confirm your income.
  5. Wait for the lender to make a loan decision: After you apply, wait for the lender to review your application. Some lenders might approve you within seconds, while others may take longer. If a lender denies your loan, ask them for an explanation. Applying with a co-borrower or co-signer, improving your credit score, reviewing your credit report for errors or requesting a smaller amount may improve your chances of approval.
  6. Sign the loan agreement and receive funds: Once approved, the lender will send you a loan agreement to sign. After you sign the agreement, the lender will most likely deposit your funds directly into your account. The time of funding varies for different lenders—some lenders can issue the funds the same day while others may take a week or longer.
  7. Repay your loan: Finally, repay your loan as promised. Making late payments or defaulting on the loan can damage your credit score. Setting up autopay is one way to ensure you’ll never miss a payment.

Pros of Moving Loans

  • Quick access to funds: If your loan application is approved, some lenders may deposit your funds into your bank account the same day or within a week.
  • Flexible loan terms: Some lenders allow you to take out personal loans for moving with loan terms as short as 12 months and as long as 84 months. A long-term loan may have a lower minimum monthly payment, which might better suit your budget. However, the downside is that you’ll pay more in interest over the life of the loan.
  • Lower interest rates than credit cards: The average interest rates for personal loans are usually lower than those for credit cards. If you have a good credit score (at least 670) and a stable income, you may be able to secure a good interest rate—an interest rate that’s lower than the national average.
  • No collateral required: Since loans for moving typically require no collateral—an asset that secures the loan—you won’t have to worry about a lender taking your asset (at least without a court’s permission).

Cons of Moving Loans

  • Fees: Some lenders charge origination fees between 1% and 8%—these fees can be a huge drawback since the lender usually subtracts them from your loan amount. Other common personal loan fees include application fees, returned check fees, late payment fees and prepayment fees.
  • Potentially high interest rates: If you have less-than-stellar credit or minimal credit history, your lender may charge you high interest rates. Some lenders have APRs above 30%.
  • Missed payments can damage your credit score: If you miss a payment or default on the loan, it can damage your credit score. This will make it more difficult for you to qualify for future loans.

Moving Loan Alternatives

If you want to avoid the potential cons of a relocation loan, consider these alternative options to help cover your moving expenses or rent.

0% APR Credit Card

Borrowers with good to excellent credit scores (at least 670) can avoid paying interest and high fees with a 0% APR credit card. These cards come with interest-free promotion periods, which can last for up to 21 months. If you pay off your balance before the promotion period expires, you won’t have to worry about paying interest. However, providers will charge interest on unpaid balances once the introductory period ends.

Family Loan

Family loans are another way to avoid paying interest or to pay minimal interest when it comes to your relocation expenses. With this option, you can also avoid the formal loan application process. The loan agreement between you and the family member should spell out the terms and conditions of the loan. Repay the loan as promised to avoid causing damage to your relationship.

Payday Alternative Loan

If you can’t qualify for a relocation loan or have trouble finding moving loans for bad credit, consider using a payday alternative loan. Some federal credit unions offer these loans, which are designed to help you avoid the high-interest charges of payday loans. You can borrow up to $2,000; loan terms range from one to 12 months and the maximum interest rate is 28%. To use this option, you must be a member of a federal credit union or be eligible for membership.


Instead of using a personal loan for moving, it might be better to use your savings, if possible. If you know how much it will cost, then create an automatic savings plan to cover most or all of your relocation expenses.

Relocation Package

If you’re moving for a new job, ask your new employer if it will cover some of your relocation expenses. Some employers offer this to employees as an incentive to accept the job offer. Even if the employer doesn’t offer this, you can ask for a relocation bonus or try negotiating a higher salary.

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