Can I Get a Line of Credit with Bad Credit?

A line of credit is a flexible loan. If you take one out, you’ll be able to access money whenever you need to cover expenses. Even if you have bad credit, this type of loan may be a good option for you. Let’s take a closer look at what a line of credit is and how it works.

How do lines of credit work?

Lines of credit let you borrow as much or as little as you want up to your set credit limit. Once you get approved, you’ll have access to funds that you can borrow from as needed. Then, you can either pay back the loan all at once or over time. With lines of credit, interest will begin to accrue as soon as you start taking out money. You’ll only pay interest on the amount you borrow.

Can I get a line of credit with bad credit?

If you’re interested in a line of credit but don’t have great credit, not to worry. Some lenders will consider factors in addition to your credit score, like your income and employment history, when deciding whether to approve you. This means you might get approved for line of credit with poor or fair credit.

Benefits of lines of credit for bad credit

There are several benefits of lines of credit for bad credit, including:

Quick funding

You won’t have to wait weeks or months to access your funds. Depending on the lender, you may receive the money the same day you apply, within 24 hours, or in a few business days. This is great news if you need funds right away.


Lines of credit for bad credit are a great choice if you’re unsure of exactly how much money you want to borrow. You’ll have access to funds that you’ll be able to pull from at any time during the draw period.

Only pay interest on what you borrow

Compared to other loans, a line of credit is affordable. This is because you’ll only pay interest on the amount you withdraw. For instance, if your line of credit is for $2,000 and you borrow $500, you’ll only be responsible for interest on the $500.

Good credit not needed

Many lenders don’t require you to have a good credit score to qualify for a line of credit. This means if you have bad credit or no credit, you may still get approved.

How to get a line of credit

To get a line of credit, follow these steps:

  • Compare lenders: Shop around and look for lenders that offer lines of credit for borrowers with bad credit. Explore the interest rates, terms, and fees of each option.
  • Choose a line of credit: Once you’ve shopped around, choose the right line of credit for your unique situation. Read the fine print before you move forward with the application.
  • Fill out and submit your application: Fill out your application online or in person. You’ll likely need to share a few personal and financial details.
  • Withdraw funds: If approved, the lender will give you access to funds that you can use up to your credit limit. Do your best not to withdraw more than you actually need.

Does getting a line of credit for bad credit hurt or improve your credit score?

Here are some ways that getting a line of credit can affect your credit score:

  • Increasing available credit: Your credit utilization, or the total debts you owe divided by your total credit limits, accounts for about 30% of your credit score. A good rule of thumb is to keep your credit utilization ratio below 30%. Getting a line of credit can increase your available credit, which can lower your credit utilization ratio and increase your credit score. Just make sure you don’t use more than 30% of your credit limit, since this can have a negative impact on your score.
  • Making on-time payments: Payment history makes up about 35% of your credit score. By making consistent on-time payments with your line of credit, your credit score can improve. Try to avoid late or missed payments, as these can bring down your score.
  • Adding to your credit mix: Your credit mix accounts for about 10% of your credit score. Getting a line of credit can add to the types of accounts you have on your credit report, which can improve your credit score.

Get an Advance America line of credit

Advance America offers lines of credit to borrowers with a range of credit scores. You can easily apply online, and may get approved with poor or fair credit. Then, you can withdraw funds as needed and will only pay interest on what you borrow. Visit Advance America today to learn more about the loans we offer.

The Advance America advantage

Since 1997, Advance America has helped millions of hardworking people with a variety of financial solutions including Payday Loans, Online Loans, Installment Loans, Title Loans and Personal Lines of Credit.

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