If you were a lending institution, would you want to lend money to someone who has a poor financial history? This is why it is difficult to get a loan with bad credit. People with bad credit has a history of not paying bills on time, buying things that they cannot afford, and other negative qualities that scare away lenders. But just because you have bad credit does not condemn you from ever being able to get a loan.
In today's economy, a large percentage of the population has marginal or poor credit, because people were spending a lot more than they could afford to. They were defaulting on mortgages, declaring bankruptcy and leaving their lenders hanging in the wind. The banks were losing money and the only way that they could see to this was reduce the loans they just handed out and raise the interest rates on all of them. Banks make money off of lending money and through the interest you pay. Because they want to make sure they get some kind of income return for their investment in you via the loan, they charge a higher interest rate. That way, even if you default on the loan, they would have gotten more money from it than they would have.
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So while it is much more difficult to get a loan with bad credit, it still happens every day around the country. You can take several steps to make yourself more attractive to the lenders. Pay your bills and payments on loans on time and build your credit. As you build your credit, you can get reduced interest rates and become the kind of borrower that banks want to give money to. So the next time you buy a car or house or expensive television, you can get a better deal on your loan.
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