How Does Bad Credit Affect Unsecured Loan Approval?
The problem with unsecured loans and bad credit is the fact that bad credit only adds risk to an already risky financial transaction. Since unsecured loans do not have any asset backing up the loan repayment, the risk of default scares lenders away even more. Bad credit, thus, will only turn odds against the applicant in terms of approval and even if approval is possible the loan terms will not be too advantageous. It all depends on your credit score and history. If you have less than average credit score due to late payments or a missed payment it is still possible to obtain an unsecured loan without difficulties. However, if you have had a past bankruptcy or defaults on your credit history, you will have more difficulties during the qualification and approval process and you may not be approved at all for an unsecured loan.
