Step 1
Increase your credit score. If your credit score is below 600, attempt to improve it before applying for a bad-credit home improvement loan. Adding 20 or 30 points doesn\'t result in good credit. However, the higher your credit score, the lower your interest rate. A person with a 580 credit score might qualify for a 14 percent interest rate, whereas a person with a 610 credit score might obtain an 11 percent interest rate.
Step 2
Secure the loan. To obtain a home improvement loan with bad credit, you\'ll need some type of collateral or security. This can include any piece of valuable personal property. Some applicants use a vehicle title, electronics or jewellery. If you own a home, inquire about a home equity-home improvement loan. You can borrow money from your equity and use the funds to improve your living space.
Step 3
Use a co-signer. Collateral isn\'t always enough, and if you have bad credit, the lender might require a co-signer. Choose someone with a good credit history, and make sure the person understands the co-signing arrangement. If you default on the home improvement loan, they\'re automatically obligated to repay the funds.
Step 4
Find a lender that offers bad-credit loans. Many lenders don\'t offer bad-credit home improvement loans. To find one that does, use a loan broker. They work with various lenders, and they\'re generally able to connect you with a bank or finance company that offers loans to people with less-than-perfect credit. In addition to collateral and a co-signer, these lenders may require a down payment.
