The amount of money you can get through a personal loan with a credit score of 480 may not be very much. You may be able to get a few hundred dollars through payday loan organizations, or a few thousand through a secured loan like a title loan. Unfortunately, this is considered a low credit score which makes it difficult to be approved for loans at all, and even if you are approved it may not be for much money.
A low credit score is not ideal if you’re in need of a personal loan. Getting approved for a personal loan if your credit score is under 580 may be very difficult. Since your credit score is an indicator of how trustworthy you are with money, lenders who see a low credit score may not want to work with you. This concept is sometimes called “creditworthiness.” Creditworthiness is basically the measure of how worthy you are of new forms of credit based on your past borrowing history.
If you’ve made payments on time in the past, always paid off your loans or credit cards by their due dates, and you don’t have very much debt, then you’re likely considered to be creditworthy. Having a good credit score and being creditworthy go hand in hand. If you’ve missed payments in the past, have a lot of Outstanding debt, and have loans or credit cards in collections, then lenders will view you as less creditworthy.
Boosting your credit score and becoming creditworthy will have a lot of advantages. You’ll be approved for more loans and different financial products, and you’ll be offered better interest rates and more flexible loan terms as well. But how do you make this happen? There are a few good ways to start to increase your credit score.
- Always pay your bills, loans, and credit cards on time. Every time.
- Pay down your outstanding debts by making more than the minimum payments.
- Lower your overall credit card usage and pay it off by the end of each billing cycle.
These simple tips can help you as you start to work on improving your credit score.