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Line of Credit Bad Credit

It is possible for you to get a line of credit if you have bad credit; however, you will have to pay a higher interest rate on that credit.

Lenders will make lines of credit available to those with bad credit if they are willing to pay a higher interest rate. Those with bad credit may also be required to pay off the line of credit faster and be given less credit.

In most cases businesses with bad credit won’t be able to get lines of credit from banks. Most businesses with bad credit will be forced to deal with hard money and other internet lenders. These lenders usually charge higher interest rates and may require prompt repayment.

Where to Find Lines of Credit Bad Credit

There are a number of lenders that do make lines of credit available to businesses with bad credit. The most common bad credit line of credit made available to businesses is a hard money or direct line of credit. This can also be called a business cash advance.

This is a high interest line of credit made available quickly by an internet lender. These lines of credit will come with very high interest rates. They will also have to be paid off very quickly usually within a few months.

To get these lines of credit a business will usually have to demonstrate that it has income or cash flow. The lender may require the business to submit a bank statement to prove they have the cash flow.

Private equity lenders will make lines of credit available to businesses that have collateral. Collateral used for such loans can be real estate equity, inventory, equipment and accounts receivable. In a private equity line of credit the collateral secures the credit. These lines of credit are available to those with bad credit because collateral is involved.

Home Equity Lines of Credit Bad Credit

It is usually possible for those who have bad credit to get a home equity line of credit because a HELOC is a secured line of credit. Those who have bad credit will face some limitations on equity of lines of credit.

The lender will charge much more interest on equity lines of credit for those with bad credit. The interest rate will be several points higher so the payments will be higher.

The lender may also limit the percentage of the equity that you can borrow against with such a line of credit. This can substantially reduce the amount of credit that is available.

Lines of Credit with Bad Credit

The best way to get a line of credit with bad credit is to try and improve your credit score before applying. Taking a little action to examine and repair your credit report can save you hundreds on interest charges.

Contact the big three credit bureaus and get a copy of your credit report. The big three are Experian, Trans Union and Equifax. Their websites can show you how to get a free copy of your credit report.

Once you get your credit report, take a close look at and make sure there’s no false or inaccurate information on it. If you see false or inaccurate information on the credit report you can have it removed. Taking bad data off your credit report can raise it several points and help you get you a better deal on a line of credit.