It used to be that having bad credit could be something that really held you down in life; with few opportunities to pull yourself out of that hole. However, as is usually the case with competition, the new climate has seen lenders spring up specifically to cater to many people still suffering from the recent economic downturns in the West.

Now, a quick online search can find you several options for the best unsecured personal loan bad credit direct lender; and you can compare and contrast using any of numerous loan calculators to determine the best fit.

Find Out Your Credit History

The most expedient way to do this is to obtain your once-yearly free report from the top three credit bureaus. By federal law, Experian, TransUnion and Equifax are obligated to send you a print copy; you can also sign up for free at to view your history and score online.

This is important so that you understand your options. If your score is below about 640 – which is considered “Fair” – then you can’t expect the best interest rates. This is true even if you go with a lender that doesn’t perform a credit check; there’s a reason, after all, that you would even go to such a lender, and the rates will reflect what they can expect of your creditworthiness as established to date.

The other big reason to check your credit score is so that you can be galvanized into action to improve it. By paying your monthly bills on time, in short order, you will see it rise in just a few months, a credit score of 700 is considered good, and the low interest rate offers you’ll receive reflect this.

The Secured Loan vs the Unsecured Loan

With the secured loan, you’re putting up something – such as your house, gold assets or automobile – in order to obtain the loan. If you fail to pay it back by the time specified, then the lender has a legal claim to your property. Most people only use this type of loan if they need a lot of money, or perhaps, if their credit is poor.

An unsecured loan is based almost entirely on your creditworthiness. Since you don’t need any upfront collateral, the lender must charge you an interest rate to cover the amount of risk he’s taking by “giving” you the money. You’ll be paying a rate determined by your credit history; however, there are some lenders that don’t perform credit checks; such lenders are worth considering before you go the secured loan route.

To Do List

Once finished, take time to gather all the documentation you’ll need before seeking out specific lenders. Even if these are relegated exclusively to the online space, you’ll want everything at your fingertips – most people are actually denied loans because of incomplete information.Sometimes, this necessitates making corrections on your credit report , or approaching your employer for specifics. The obvious info includes your former and most recent employer, pay stubs and tax files for the previous two years, your gross income and current debt obligations. Any loan website will give you a checklist – even for lenders that wouldn’t consider.