?I am a teacher in a reputed high school. I have always paid my bills on time and have never gone overboard with my spending. This Christmas my husband and I decided to redecorate our house. So I applied for a personal loan from my bank. To my utter shock the bank refused to give me the loan on account of a bad credit score.? Jennifer Jean

Sounds very similar to what you are going through, doesn?t it? The most unfortunate thing about bad credit is that people do not come to know that they have one until they are refused credit. What?s even worse is that these days you can end up having an abysmal credit score for simplest of errors like an unpaid parking ticket. Even changing your address frequently can give your credit status a setback.

However, you can take heart in the fact that besides mainstream lenders there are a lot of lenders who exclusively deal with Bad Credit Personal Loans. This category of loans caters to credit requirements of those people who do not have an impressive credit background. But the tag of ?bad credit? doesn?t come cheap as is obvious from the high rates of interest that bad credit personal loans carry.

Basically every lender has an independent way of ascertaining the interest rate on your personal loan. Although your credit score plays a critical part in getting your personal loan approved, yet other factors like your income, your job history, savings and collateral also play an equally important role in determining the interest rate of your loan.

While there is not much you can do to change your job history or your income, you can however make efforts to improve your credit history. The first step in this direction is to find out about your credit score, a score that measures your credit worthiness by allotting you a number between 300 and 850. You can attain this score from the three credit reporting agencies like Experian, Trans union and Equifax. A score below 600 means you have bad credit.

Now that you know you have a bad score, take steps to bring them up like paying your bills on time and closing any unused accounts. A better credit score automatically translates into a lower interest rate.

Shopping around or requesting for quotes online is often considered as the best way to get a bad credit personal loan. But you must not apply for credit from too many lenders. This is because the moment you apply for credit, the lender gets the permission to run a check on your credit history and more enquiries on your credit status will lower your credit score. While applying for a personal loan your efforts must be directed towards keeping as good a credit score as possible.