Understanding Your 430 Credit Score

Personal loans are a broad category of financial products that include installment loans, secured loans, unsecured loans, mortgages, car loans, and more. Usually, personal loan lenders will base approval on the borrower’s creditworthiness, but there are special types of personal loans designed for borrowers with lower credit scores as well.

Personal loans can be variable-rate or fixed-rate loans. When a loan has variable rates, interest rate charges may fluctuate with each payment. Variable rates also mean that minimum monthly payment amounts may fluctuate as borrowers repay their loans. When a loan has fixed rates, interest rate charges–and therefore monthly payments—will stay the same throughout the loan terms. While variable rates may help borrowers save money some months, the predictability and consistency of fixed rates are usually preferred by bad credit borrowers.

One of the most common places people can get installment loans is at a bank. However, banks usually only work with borrowers who have excellent credit scores. If you have a score in the “very poor” range, you are probably better off finding a loan with a credit union or other private lender.

An unsecured credit card is a type of revolving credit, which means borrowers have access to a set credit limit every month. As the borrower spends against that credit limit, they accrue a monthly balance. At the end of the month or billing period, borrowers must repay at least a portion of that balance. Then, their credit limit renews, and the cycle continues.

Credit card accounts can be a great financial tool, allowing consumers to consistently access cash without having to reapply for loans. But it’s also really easy to accumulate unaffordable credit card debt if borrowers don’t pay off their balances consistently.