For those who seek a poor credit rating loan, you need to understand some of the factors that will determine your eligibility. Some of these are the same as for those with good credit in some respects, but the rules are somewhat more stringent for those who have poor credit. It is not impossible for someone with poor credit to obtain a loan, but it is definitely more difficult and time consuming.

Qualifying factors

The lender will consider several things before he considers offering an approval for a poor credit rating loan. Each of these factors will be weighed on its individual merits and then given an overall rating that will allow the lender to decide if he thinks a particular applicant is worth the risk for a poor credit rating loan. Here are some of the factors that a lender will use to determine risk factors for an applicant with poor credit:

• Employment stability

• Employment longevity

• Income

• Debt to income ratio including new loan

• Age of most recent negative credit item

• Type of residence (rent or own)

• Banking experience

• Type of assets

• Overall financial stability

• Reasons for delinquencies

• Age of applicant

All of the above items are weighed and considered before the lender renders a decision. The age is not a factor in regards to actually granting the loan, but it is a factor that the lender will review as part of the overall picture and the reasons that the delinquency occurred. Lenders understand that a young person just starting out can go a little wild with a new credit card and not understand the later implications. However, if someone in their 30’s or 40’s does the same thing, it is no longer lack of knowledge or understanding, but financial irresponsibility.

Determining factors for approval

After reviewing all the information, the lender will make a decision on your application for a poor credit rating loan. By weighing all of the qualifying factors, and some things he has discovered by speaking with you and doing his credit investigation, he will decide if he feels you present enough of a credit risk to be declined or if he feels you have enough positive factors going for you that he is willing to give you a chance. At this point, you are not in the bargaining stages, so the ball is in the lender’s court now. What you must do at this stage is provide him with enough positive vibes that he believes you will be true to your promise to repay the loan within the terms specified by the contract. With a poor credit rating loan, the only thing the lender has to go by is his belief in you, positive or negative, and the stability of your finances. Of course, if you have rebuilt some credit such as a low credit line credit card, it may be a little easier for him to make a positive determination.