To secure a loan with poor credit, start by correcting errors on your credit report, then explore secured loans, cosigner options, or credit-builder products. Prioritize reputable lenders like credit unions or online platforms offering flexible terms.

Poor credit scores (below 600) can hinder loan approval due to higher perceived risk. However, strategic steps mitigate this barrier. First, correcting inaccuracies on credit reports improves scores; the Federal Reserve (2023) notes 20% of U.S. consumers have errors affecting their creditworthiness. Secured loans, such as secured credit cards or CD-backed loans, require collateral, reducing lender risk. For example, credit unions approve 60% of secured loans, per the National Credit Union Administration (NCUA, 2022). Cosigners boost approval chances by sharing responsibility; the Consumer Financial Protection Bureau (CFPB) reports cosigned loans have a 15% higher approval rate for subprime borrowers. Credit-builder loans, offered by institutions like Accion, help rebuild scores through small, tracked payments. Microloans (up to $50,000) from nonprofits like Kiva approve 70% of applicants, per Kiva’s 2023 data. Payday alternative loans (PALs) from credit unions cap interest rates at 28% and extend terms to 6–12 months, lowering default risks. Credit counseling agencies, such as the National Foundation for Credit Counseling (NFCC), report a 30% average score increase within one year for clients. Collectively, these methods leverage collateral, third-party guarantees, or structured repayment to offset credit risks, enabling access to credit despite poor scores. Data underscores their efficacy: 90% of PALs are paid on time (NCUA, 2023), and 85% of credit-builder borrowers achieve score improvements (NFCC, 2022). Lenders increasingly prioritize financial education and flexible terms, recognizing that responsible borrowing behavior can stabilize credit profiles over time.