10 Best Bad Credit Options for a Personal Loan 640 Credit Score

Writer and editor - Joseph Smith | Updated on 2020-01-29

You may think that your 640 credit score is quite decent, but lenders won’t see it the same way. In fact, being rated 640 by any of the big 3 credit bureaus (Experian, Transunion, and Equifax) is considered below average on a range between 300 and 850. But where there is a will, there is a way, and here are some options you can try when you really need an injection of funds.

Increase your credit score

The easiest way to get over bad credit scores is to raise them, but that is easier said than done. Begin by confirming that the credit bureaus have got your information correctly by requesting a credit report. Everyone is entitled to one free credit report every year, and this will show you your entire financial history. If you see anything out of order, report to the FTC and the lender, who will be forced to rectify the error within 30 days.

Credit Score of 640 Loans

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Unfortunately, lenders rarely get it wrong, and this means it’s up to you to fix the problem. Since most people end up with a 640 credit score by falling behind on bill payments, start by keeping up with any monthly bills. Paying off debt is also essential because it can help to raise your credit scores immediately, but it may be difficult for you when you’re looking for credit.

Instead, start with smaller loans and credit card debt that you can handle. Every payment will raise your credit score and make it easier to get a loan. Even if you can’s completely pay off credit card debt, just ensure that the utilization falls below 30%. Lenders will report such card activity as positive and raise your credit rating.

Increasing likelihood of a personal loan with 640 credit score

When you realize that lenders are only wary of lending to you with a low credit score, find a way around it. For example, request for a small amount in funding so that the lender does not take a huge risk lending to you. You can also propose to pay over a shorter time, which also means less risk to the lender as they can expect completed payment in less time. Most people are wary of short repayment terms because of high interest, but this isn’t the case. Shorter terms may have higher interest, but since it is paid only a few times, it ends up being less than numerous smaller interest payments.

Ultimately, though, it will come down to which lender you choose because every lender will have different terms. By looking to many different lenders and what they have to offer, you may end up identifying a very good loan offer with only limited interest. Besides, you can then ask for smaller loans from all the identified lenders to raise a lot more money. If you also have credit cards that you don’t use, now is the time to use them. These are seen as additional sources of funds and prove that you will be able to keep the repayment terms.

How much will you get?

To avoid getting your hopes up, do not expect guaranteed approval from any lender. Most lenders will be very flexible when extending credit and offering loans, but they can never guarantee approval. But if you do get approved, expect to receive up to 200% of your annual income before tax in credit. The final amount will depend on other factors such as employment and debts, but you can generally expect amounts within this range.

Joseph Smith

Joseph Smith
Writer and editor

Joseph Smith is an experienced freelance writer with over 11 years of experience. His area of expertise includes finance, loans and lending. His work has been featured on various large websites including this one.
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