How to get a private student loan with less than perfect credit

Most private student loans require you to have good credit in order for you to obtain the loan. However there are some alternatives to getting the loan even if your credit is not so perfect.

Instructions

Difficulty: Moderately Challenging

1. In many cases when applying for a private student loan you will need a credit-worthy co-signer (credit score 660 and up). This can be a parent, family member or friend. Keep in mind that most banks use credit-scoring as the initial route to determining if you are eligible for the loan. With most banks you may request to have your co-signers name removed if you make timely payments on your loan for a year.
2. Banks who offer student loans, have different types of loans that have different requirements. Ask the bank specifically what is there required credit score, and what credit reporting agency do they use (Equifax, Transunion, Experian) BEFORE applying for the loan. Since not all credit reports are the same so if you know which report the bank is going to use then you can determine if you want to apply for the loan or not.
3. If you get turned down for the loan you may appeal for reconsideration. In the reconsideration process you can submit information to the bank proving that you can pay this loan back. Information you should submit is a detailed letter explaining why you should be considered for the loan and explain any negative credit accounts on your report, your paystub from your employer, a current copy of your credit report with current positive accounts circled. You should also submit items that are not reported to the credit reporting agencies such as utility bill payment history (you can obtain this from your electric company), rent payment history (you can obtain this from your landlord), cell phone company payment history. Only submit this information if you have a good paying history with these companies. Payment Reporting Builds Credit (www.prbc.com) is new way to report items that are not reported to the three major credit reporting agencies. You can submit rent payments, utility payments to be generated into an alternative credit report for a small fee. You can also submit this for your loan reconsideration.

Tips & Warnings

• Ask specific questions outlined above before applying for a loan, so that your credit will not be pulled to get denied. The more inquiries on your report the lower your credit score may become.
• The lower your credit score the less amount of funds you can obtain. The maximum is usually $5000.
• Borrow what you need at that time so that you do not have to go through the process of applying all over again and with an additional inquiry on your credit report.