9 Reasons You Need Good Credit

5) Obtain a Personal Loan

Personal loans can be used for a variety of things. You may need to pay off your credit card balances. You may want to go on a vacation. Or, you may simply catch yourself in a financial bind. Whatever you need a personal loan for, you may find yourself, much like other loans—on the losing end.

A personal loan is also dependent on how well you have managed your credit in the past. Again, the bank wants to know that you can pay off this loan. In addition to having a high interest rate, you may also be subject to putting up collateral or asking someone with better credit to cosign the loan for you. This puts that person at risk if you default on the loan, often leaving a loved one to take on your responsibility.

Unless you need a personal loan, if you have bad credit, you may just want to avoid it. Often the cost of fees associated with the loan you would get is going to cost you much more than whatever it is you need the loan for.