Contrary to what many people believe, it is possible to get a loan with bad credit. In fact, your credit may not even be as poor as you think. You can see exactly what your credit history reflects by taking advantage of the free credit report each of the major credit reporting agencies must by law provide upon request annually. If your credit score is in the 550 range or lower, you are considered to have poor credit.

Besides your credit score, your credit history will help determine whether or not a lender will extend you credit. Your credit history is different than your credit score; it provides a more detailed record of your use of credit than could a simple number. Your credit history report reveals not only the timeliness of your payments to creditors, but also the number of accounts you have open, the balances of each of them, and your total amount of debt.

It is entirely possible to get an unsecured loan with bad credit. The bad news is that you will pay dearly when it comes to the interest rate on your loan. Lenders providing unsecured loans must somehow mitigate the risk they incur by not requiring security for the loan. They do this by charging much higher interest rates than for a comparable secured loan. Couple this with bad credit, and the interest rate may skyrocket to the point where it may not be the best option for finding a loan.

A better option for getting a loan with bad credit could be a secured loan. As the name suggests, a secured loan requires that you put up some type of security to protect the lender in the event you default on the loan. A mortgage is an example of a large secured loan, as is an auto loan. Failure on the part of the borrower to meet the terms of the loan agreement could result in foreclosure on a home, or repossession of an automobile or a boat.

You may be interested in getting a home equity loan or line of credit, or doing a cash out refinance loan on your home. Your credit history will be taken into consideration, though there are FHA loans, Fannie Mae Loans, and VA loans backed by the US government that have less stringent credit requirements than traditional mortgages.

Besides homes and automobiles, a plot of land may also be used for collateral on an unsecured loan. In fact, anything that is fixed to the property that has significant tangible value can normally be considered as security for a loan. Other valuables like jewelry and antiques may sometimes be used as collateral depending on the lender, though a loan backed by smaller assets will probably carry a higher interest rate than a loan backed by real estate or a vehicle.

If the item you wish to purchase is not an immediate necessity, you could consider delaying the purchase while you work on improving your credit. With good credit you will be more likely to be approved for a loan, whether secured or unsecured. Just as importantly, you will be able to avoid bad credit lenders who may have less than ethical business practices.

Gregg Pennington writes articles on a number of topics including loans, debt and credit. For more information about finding a loan with bad credit visit: http://www.onlinemoneysources.net/bad-credit-personal-loans.html