How to Borrow Money When You Have Bad Credit in Texas

They say that everything’s bigger in Texas, but that’s not the case regarding credit scores. The average VantageScore credit score in the Lone Star state is 680. This score is one of the lowest in the country, placing the average Texan 15 full points behind the national average. 

According to VantageScore’s rating system, 680 isn’t a bad score. In fact, it falls on the lower end of good credit, so most people will be able to borrow a conventional personal loan. 

However, VantageScore crunched a broad spectrum of scores to find an average — plenty of them are much lower than 680. For those borrowers with poor credit, finding a loan becomes a lot harder.

What is Poor Credit? 

According to the VantageScore system, subprime credit ranges between 300 and 670. Poor credit in particular falls from 300 and 580. 

You only get this kind of score if you had some problems with past personal loans or lines of credit. It means you paid bills late, let accounts go delinquent, and carried over a large balance without paying it off promptly.

Altogether, this kind of score suggests that you may encounter these problems again to future lenders. Some of the biggest banks and online direct lenders in Texas consider this too much risk to lend you money. 

Others simply restrict how you borrow to mitigate their risk, like online payday loans direct lenders that raise their prices and shorten their terms.

Does Bad Credit Always Lead to a Payday Loan in Texas?

When you’re in a tough spot, a payday cash advance may seem like your only option. Online payday loans direct lenders make it easy to apply and qualify for their loans, removing much of the red tape that would trip you up with a conventional personal loan.

However, the average payday loan in Texas comes with an APR as high as 664%. All that is due by your next payday, which can be hard if you’ve hit a rough patch. 

If you don’t have enough expendable cash in your paycheck to cover your full loan, you could face late fines and extra interest charges.

While a payday loan may be an option in an emergency, it should only ever be used when you’re certain you can juggle both a high cost and short turnaround.

Installment Loans Give You More Time

Unfortunately, a higher APR is a consequence of bad credit. However, you don’t always have to repay what you owe in one lump sum. A financial institution such as MoneyKey services emergency loans with longer terms. 

If you qualify for lending options in Texas through MoneyKey, you’ll have more time to come up with your loan payments. That’s because they’re online loans with monthly payments, breaking up what you owe into smaller installments. 

Individual installments will be smaller than what you borrow, so you don’t have to use up as much of your paycheck. This payment style might make it easier to juggle your responsibilities without dropping the ball.

Even the best installment loans Texas offers come with rates and finance charges. That’s the cost of borrowing money. And when you have bad credit, you’ll likely pay more than someone with a great score. 

Always check that you can handle these fees before you accept money. It’s the best way to ensure you find a loan that fits your emergency and finances.