How Does It Work To Qualify For Installment Loans With Bad Credit?

If you're in the market for an installment loan, you've probably considered whether your credit score is high enough to qualify. With so many credit score models and misunderstandings in the financial world, it can be tricky to figure out if qualification is viable for you.

In this guide from Utah Title Loans, Inc., we'll go over what bad credit actually is, whether you need a good score to qualify, and alternative bad credit loans for when you can't qualify for installment loans.

What Qualifies As Bad Credit?

A low credit score can make it difficult to acquire credit cards and loans from banks and credit unions. This is because lenders consider a low credit score to indicate you are less reliable in meeting financial obligations (i.e., repayments). 

If you have a low credit score, the assumption is that you missed payments or have poorly managed your finances to reach that point. That isn’t always the case; job loss and missing work due to injury and illness can affect your finances and ability to make repayments. No matter how the low credit score happened, it can affect approval for loans.

However, your credit score can vary depending on the scoring system you use. The two main ones are VantageScore and FICO. Getting to grips with both of them can help you determine where your current score ranks.

Learn more about these credit score models below:

1. VantageScore Model

Experian, Equifax, and TransUnion (the three major credit bureaus) formed VantageScore as an independent joint venture almost ten years ago. Since then, they've released a variety of credit scoring models. However, the most commonly used systems are the VantageScore 3.0 and VantageScore 4.0. 

While FICO (discussed below) is the most well-known scoring model, you may see VantageScore credit ratings if you check your score from your bank, credit card issuer, or a personal finance website. 

Here is how the system ranks credit scores:

• Subprime/not prime — 300 to 600
• Near prime — 601 to 660
• Prime — 661 to 780
• Super prime — 781 to 850

2. FICO Model

Your FICO credit score will be based mainly on the information provided in your credit reports from the three major credit bureaus — Experian, Equifax, and TransUnion. As such, payment history, amounts owed, credit mix, and credit utilization ratio are the main variables that make up your score.

Here's how your score ranks on FICO's model:

• Poor — 300 to 579
• Fair — 580 to 669
• Good — 670 to 739
• Very good — 740 to 799
• Exceptional — 800 to 850

Do You Need Good Credit To Qualify For Installment Loans?

You now know what a bad credit score is, so let's jump into the core question — do you need good credit to qualify for installment loans? Unfortunately, the answer isn't as simple as yes or no.

Generally speaking, you don't need perfect credit to qualify for installment loans in Utah. However, every lender works differently. If you request an installment loan from us, we do check your credit score before approving you, but you will not get denied approval just because you have bad credit. Excellent credit is not a requirement for our loans.

However, bad credit can limit how much you can borrow. Your loan amount is based on your ability to afford the monthly repayment. You can borrow up to $1,500 with an installment loan, but poor credit borrowers will likely receive less than the maximum amount. That said, you can still qualify if you meet installment loan requirements.

Installment Loan Requirements In Utah

To qualify for installment loans in Utah, you will need to meet a few requirements. Thankfully, we don’t have a long list of documents you will need, just a few to verify your identity, age, income, and checking account details.

Here are the installment loan requirements in Utah:

• ID — You must provide a state-issued identification to acquire an installment loan from us. You can use any identification that displays your full legal name, date of birth, and portrait photograph.
• Proof of income — The proof of income we require is your most recent pay stub. This gives us a good idea as to whether you can afford to repay an installment loan.
• Checking account statement — We use your checking account statement in tandem with your pay slip to establish an accurate picture of your incoming and outgoing finances.

Naturally, your name must match across all your documents. You also must be at least 18 years old to qualify for a loan. If you meet our requirements, you can proceed with the simple approval process.

The Step-By-Step Installment Loan Process

With the requirements in mind, it's time to understand how to use them to get an installment loan. Luckily, it’s easy and only takes a few steps. You can get approved for an installment loan the same day you apply. After beginning the process online, you can get approved at one of our Utah branches in less than 30 minutes.

The following is how to get approved for an installment loan:

1. Complete the form found on this website. Ensure you select the right loan; we also offer other options.
2. Wait for one of our representatives to give you a call. They'll be based in your nearest Utah Title Loans Inc. location. Once they call, they will explain the essential details about installment loans and answer any questions you have.
3. Following the conversation, head to your nearest Utah store location with your required items for verification.
4. Once we verify your items, we will walk you through the final steps of the process, which involve signing a few documents. 
5. If you are approved for an installment loan, you will receive the amount you qualified for later that day or by the next business day.

After receiving your cash, you can pay off your emergency expense and begin planning for repayment. Remember, you must make monthly installment payments until your loan is repaid.

Alternative Options For Bad Credit Loans

If your credit score ends up being too low to acquire an installment loan, you can turn to loans that are created with bad credit borrowers in mind. Here at Utah Title Loans Inc., we offer two other bad credit loans that may be easier to qualify for with a low credit rating — payday loans and title loans.

Learn more about our bad credit loans below:

• Payday loans – Otherwise known as cash advances, these are short-term, small-dollar loans that let you borrow money from a future paycheck. With our payday loans, you can borrow between $100 and $500 — perfect for minor emergencies like vet bills, home repairs, car repairs, and medical bills. You will have to repay the loan with your next paycheck.
• Title loans – These are secured loans that let you borrow money by using your vehicle title as collateral. You must have fully paid off your car, truck, or motorcycle to get approved for a title loan. You can borrow up to $15,000, with your title loan amount depending on your vehicle’s value.

Get An Installment Loan In Utah – Borrow Up To $1,500 Today!

Need urgent cash today for an emergency? Borrow up to $1,500 with installment loans at Utah Title Loans, Inc. You can qualify with bad credit and won’t need to provide collateral. Get the financial help you need within one business day; fill out our online installment loan form and get approved in person in less than 30 minutes!

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.