Personal loans are based on an equally personal credit history. An individual with excellent credit is likely to find many lenders willing to issue credit at very competitive interest rates. Credit reports rank people in very simple terms: Excellent, good, fair, and poor.

A person with fair credit may be the most frustrated of all would-be borrowers. He or she is below the label of good credit and above the harsh rank of poor. Fair credit does not make lenders wish to present scores of offers. Sure, someone with fair credit could seek out a “bad credit lender”, but this could be self-defeating. Fair credit is not poor credit. There is no reason to pay for sky-high interest and agree to very harsh lending terms.

Those with fair credit should not be too worried, though. Options do exist. Amongst these options are acceptable loan offers.

Order a Copy of a Credit Report

Always order a credit report when wondering about how to find the best loan deals. Reviewing the credit report reveals all. Perhaps the current rating of the report reveals a good credit score as opposed to a fair one. Such a revelation would make things a lot easier.

Reviewing the credit report may reveal steps that could actually improve things. A defaulted debt for $200 may be worth settling. If the debt is settled and the negative remark is removed from the report, a score is going to improved.

Similarly, if things cannot be easily improved, steps can be taken to engage in long-term credit repair work. For the short-term, accepting the status of fair credit becomes unavoidable.

Search for the Right Lender

The key step to take is to perform the necessary consumer research required to find a willing fair credit lender. Among the biggest mistakes a borrower could make, is casting a wide net and apply to any and all lenders. Doing so probably would waste a lot of time since many of the lenders are not going to be willing to approve someone with fair credit. A credit score could even be weakened by applying for too many loans too soon.

Again, perform the necessary research to locate a financial institution that is comfortable lending to someone with fair credit. The chances of approval are clearly going to be greater with such a lender.

In some cases, the lender may need to be an entity outside of the traditional banking and financial world. Peer-to-peer lenders might be worth contacting. Interest rates with peer-to-peer lenders are a bit high, but they may be the only sources of approvals. Other online lenders could be worth checking out as well, but they might not be the best first source to examine.

Perhaps the best source to look towards would be a credit union. Credit unions are not bad credit lenders or risky lenders, but these institutions are more personal. Since credit unions are more personal in nature, they may be willing to approve someone whose credit score falls below the good range. The interest rates available through the credit unions as well. Those with less-than-stellar credit are always at risk for high rates of interest. Acquiring fair interest is far more preferable.

The Soft Credit Check

As mentioned before, a credit check performed for the purpose of approving a loan does affect a credit score. Certain lenders perform a pre-screening “soft credit check”, a check designed to determine eligibility and viability without a review that hurts a credit score.

Applying to a small number of lenders that allow soft credit checks would be a good plan. This way, those who clearly won’t accept the application can be screened out. Just be aware of the fact that passing a soft credit check does not automatically mean the application will be approved.

In parting, it is necessary to mention the best way for someone with fair credit to improve his or her chances of being approved for a decent loan offer. Work must commence on boosting the credit score from fair to good and beyond. Even if this cannot be achieved in the short term, the long term plan has to be in effect.