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Loans for average credit consumers

22nd November 2017 Print

Having a high credit score opens up the world of affordable and, in some cases easy, access to borrowing money, from small expenses to major purchases like a home. But not everyone has the fortune of having a great credit score. That seemingly innocent three-digit number that ranges from 350 to 850 can go down in a hurry when financial management isn’t your forte. If you’ve missed a payment here or there, filed bankruptcy in the not so distant past, or had an account end up in the hands of a collections agency, a poor to average credit score can mean you pay more for access to credit or it isn’t available to you at all. Fortunately, there are several options for individuals looking to borrow money when credit is average. 

What, Exactly, Is Average, Anyway?

Although all lenders have their own specific guidelines for what constitutes a poor, average, and great credit score, borrowers can use the following example as a guide to judge their personal standing:

- Excellent credit: 720 and up

- Good credit: 690 to 719

- Fair credit: 630 to 689

- Poor credit: 550 to 629

- Bad credit: 549 and below

The average credit score of a consumer in the United States is 687, according to Experian. This number fluctuates often based on your use of credit, new credit accounts established, and payment history, but if you fall within the “fair” category, the following loan options are for you.

Average Credit Loans

Traditional banks and credit unions are not your best bet for getting a loan when you have fair or average credit. While there may be some options available, the repayment terms or cost of the loan in terms of the interest rate charged may not make the most financial sense over the long haul. Instead, looking to smaller lenders is a smart move if you’re in need of financing a major purchase or covering an unexpected bill with a loan. 

It’s always best to start with lenders who are local to your area, as they are likely more inclined to lend to those who may have average credit. Smaller credit unions or community banks are able to look at your personal circumstances more closely than a large institution. This may result in a loan approval when other, bigger lenders would have swiftly delivered a decline. Your credit score and history is still evaluated with a small lender, but it may be less of an issue depending on how much you need to borrow and how long you plan to extend repayment. 

Another option for average credit loans is a lender offering San Diego title loans. With a title loan, you use your personal vehicle as collateral for a loan. Instead of basing approval on credit history and score alone, local title lenders simply evaluate the value of your car, truck, or SUV and your ability to repay the loan balance over time. Title loans can be a smart option when you need funds in a short period of time and have poor to average credit.

Whether credit is an issue due to poor financial management or circumstances beyond your control, having average credit does not mean you cannot find reasonable financing when the need arises. Consider your options with local, smaller lenders before heading to a big bank, and always have a plan for paying off your loan balance as quickly as possible.