Defying the Odds: Navigating Life’s Challenges with Bad Credit


When people talk about bad credit, they always frame it as something that limits your options. And it’s true, a low score imposes on your financial life, affecting everything from the chances of getting a loan to getting a new job.

Even so, plenty of people manage to live their lives with bad credit. In fact, about 1 in 3 Americans have subprime credit, according to Experian’s State of Credit Report.

How do they manage it? While they may face barriers to common financial tasks, there are ways around these obstacles.

Let’s look at the common misconceptions surrounding what you can and cannot do with bad credit, while inspiring you to explore the possibilities that still exist.

You Cannot Get Approved for Loans or Credit Cards: FALSE

FILE – This Aug. 11, 2019 file photo shows Visa credit cards in New Orleans. Credit limits aren’t always there when you need them. With a potential recession looming, it’s important to understand how issuers treat credit limits in an unstable economy. (AP Photo/Jenny Kane, File)

Getting approved for a personal loan or credit card can be challenging when you have bad credit. That’s because the financial world believes your score reflects your creditworthiness and your ability to pay them back on time. The lower it is, the less likely you will repay them promptly.

Many of the world’s biggest banks draw strict regulations on credit, denying people if their scores fall below a certain number. However, not all financial institutions share the same policies. You might have better luck qualifying for loans online.

With a quick web search, you can find a variety of online loans, including cash advance loans, installment loans, and lines of credit. While you may not qualify for every single option that your search engine generates, you will have greater options than if you stick with an in-person bank.

Online, you can expand your search to include the following options:

  • Specialized Lenders: Some online direct lenders purposefully serve people with bad credit. That’s because they know that credit scores don’t tell the complete financial story of a borrower, so they take into account other factors, like income, debt-to-income ratio, and employment history when assessing your application. If you pass their test, you might be approved for short term personal loans for poor credit.
  • Secured Personal Loans: You may also find a greater selection of options by looking at secured personal loans. These loans require collateral, so they’re only an option if you have a home, vehicle, or similar asset that can act as insurance.
  • Co-Signer Loans: Some lenders let you apply with another person who has good credit. This second applicant promises to take responsibility for the loan if you default, so it provides some extra assurance to lenders.
  • Credit Unions: Credit unions are non-profit financial institutions that operate similarly to traditional banks but are owned by their members. They often have more lenient lending criteria and may be more willing to work with borrowers with bad credit. Building a relationship with a credit union and demonstrating responsible financial behavior may increase your chances of loan approval.
  • Peer-to-Peer Lending: Peer-to-peer lending, or P2P lending, is a financial practice where individuals lend money to other individuals or businesses through online platforms. It cuts out traditional financial institutions, allowing borrowers to access funds from a pool of individual lenders who earn interest on their investments.

Renting a Home or Apartment is Impossible: FALSE


In the cut-throat rental market, your credit score may stand in the way of your next rental apartment. Landlords may check your score as part of their screening process; they believe this check provides insights into your financial habits and ability to pay rent on time.

Landlords may have limits on how low they’re willing to go, just like lenders. However, just like your choice of lenders, not all landlords follow the same rules. While a low score may pose challenges, you may still find a landlord willing to rent to people with bad credit.

According to TransUnion, one of the three major credit bureaus, a credit score may not shed light on an applicant’s true financial situation on its own. Roughly 4 out of 5 landlords prefer to see a full credit report to get the real story behind the score.

This indicates that a significant portion of landlords may be open to considering other factors such as rental history, employment stability, and references when evaluating potential tenants.

Building a strong rental history by paying rent on time, providing references from previous landlords, and showcasing your financial stability in other areas can help you secure housing even with bad credit.

If you still have trouble getting an apartment, private landlords or smaller property management companies may be more flexible when considering applicants with lower credit scores.

Employment Opportunities are Closed Off: FALSE


While it is true that certain industries or positions may conduct credit checks as part of their hiring process, having bad credit does not automatically disqualify you from employment.

According to a survey by the National Association of Professional Background Screeners, less than one-third (31%) of employers conduct credit checks on some job applicants, and a slim 16% said they check every candidate. And in many cases, the employers who did read these reports were interviewing for positions that involved handling money or company intelligence.

This indicates that a credit check is not the norm for most industries. More than two-thirds of employers won’t include this assessment when they review applicants.

If an employer does request to check your credit, let them know that your bad score is in your past and how you plan on improving your finances.

Financial Success is Forever out of Reach: FALSE


Financial success is not solely determined by your credit score. While bad credit can present challenges, it does not define your worth or your potential for financial success. Building a solid foundation for financial stability involves careful budgeting, saving, and investing wisely. Once you get these things sorted, a good score will naturally follow.

Developing a comprehensive budget can help you gain control over your finances and prioritize expenses.

According to CNBC’S Financial Confidence Survey, a whopping 70% of Americans feel stressed about their finances, emphasizing the importance of budgeting to alleviate financial pressure. By tracking your income and expenses, you can identify areas where you can reduce spending and reallocate those funds towards savings or debt repayment.

Saving money is an essential component of financial success, regardless of your credit score. Building an emergency fund can provide a safety net for unexpected expenses, reducing the need to apply for credit or loans online.

Start small by setting aside a portion of your income each month and gradually increase your savings over time.

Investing wisely can also contribute to long-term financial stability and growth. While it’s important to be cautious and seek professional advice, investing in retirement accounts, stocks, or other investments.

The Takeaway

The misconceptions about borrowing and renting with a bad score are just that — false understandings of how this three-digit number affects your life.

While bad credit isn’t something you want to live with forever, it is possible to endure until you build your history. In the meantime, it is still possible to borrow, rent, and get a job when your score is low.