Using the FICO score a 500 credit means you are in serious trouble. The FICO score is established by an organization named after the Fair Isaac Company. This score uses an equation to generate your credit score. It is this score that lenders use to determine persons credit worthiness. A 500 credit score means your credit is definitely in need of professional help. It doesn't mean you cannot ever in this life time get a loan, but if you are eventually granted a loan, the terms and conditions may not be attractive to you. A 500 credit score can also imply that you were recently bankrupt or faced a recent foreclosure. If your credit rating has been affected by a credit card debt, you should try to repay it or possibly obtain a low rate credit card and transfer the credit balance to it, you can also convert it into a loan where the interest rates are lower.
If you have a credit score of 500 and you need a loan. The conditions may be terrible. The application process, the screening process and even the amount of additional requirement you may have to meet, can become a big headache. If your credit score is bad ie 500 it does not mean that the loan company will not grant you a loan. Credit scores are designed in such a way as to identify to the lenders of credit those customers who are more risky to lend to than others. Customers who fall in the category of having bad credit are then strictly assessed by other means to determine if the bank can still offer them credit by looking to see if they fulfill other criteria such as their job status, their level of disposable income and if they can secure the loan.
You can even look into building your credit scores and putting it into a better range. You can do this by hiring a consumer credit counselor. This is a professional counselor which will provide you with all the financial education that you would need. Credit counselors would be able to bargain for lower interest rates and also set up a debt management plan. This information enables the consumer credit counselor to produce for you a DMP or debt management plan. This plan shows you how you can repay your debts over a period of time.
Most banks that offer a loan to a 500 credit score customer is due to their nature and how they can make money through their credit creation process, banks do understand that the persons who go to them for credit are the ones who needs it. Usually people with good credit reports hardly even borrow as they can save to meet the need of a future expense. The banks can require them to secure the loan with assets that they may own such as their house and property and even with certain insurance. If you are willing to provide security for your loan, then you can obtain credit.