Applying for a bad credit personal loan can prove to be a challenge when you have a low credit score.

The good news is that by doing a little research, you can find loan companies that do offer bad credit personal loans for consumers who are credit challenged.

With identity theft on the rise and scammers becoming more internet savvy,its up to you as the consumer to protect yourself from being scammed.

Here are 7 tips that will help you spot scam artist

1. Requires an upfront fee.

   If you are asked to give an initial sum of money before your funds can released, then chances are you are dealing with a scammer. Mortgage loans and business loans can be an exception as down payments are generally required.  However, keep in mind that you should only submit a reasonable amount for the down payment. In addition, scammers usually ask that the payment be sent to them through wire money transfer. Such a strategy is a very clear sign of a fraudulent company.

2. Guaranteed Approval.

   While there are specialized lenders, called “subprime” lenders that will approve loans and credit for people with bad credit. These subprime lenders will still pull your credit if they are going to extend a loan or line of credit. They never GUARANTEE approval. The only time I’ve ever seen a true guaranteed approval line of credit was for lenders that will give you a line of credit thats good to purchase merchandise from within their own merchandise catalog. These are called merchandise credit cards and while they are a great way to rebuild your credit (if they offer to submit your payment history to the credit bureaus). I’ve found the merchandise in the catalogs to be a bit more expensive than what you can buy in the store.

3. 1-900 Customer Service number.

   Why should you have to pay to speak to a prospective lender? This should be a big red flag to you that this is not a real offer of credit.

4. No Working Phone Numbers.

   While you will need to eventually give the prospective lender your social security number in order to obtain an approval, be wary of online lenders. Do you research, there are FAKE sites set up by scam artist. We have found some set up by scammers located in Thailand! They just want your information to sell to ID thieves. ONLY give out your social security number after you have thoroughly researched and spoken with the lender. Most of these scam sites don’t have working numbers.

5. Offers you a loan using SPAM email, unsolicited phone call, or fax.

   Come on! You should know by now that you don’t do business with companies that contact you using SPAM and a mass fax from some unknown person should never make you want to pick up the phone and call them for more information.   Many scam artist buy list from the credit bureaus of people recently turned down for a loan.  They then call them, out of the blue and tell them they have been pre-approved.  You just need to sign their docs and send their fee.  Sometimes they call it an insurance payment. Do your research, because some legitimate companies do the same thing.

6. Loan Offered From Telemarketer.

   Its illegal for companies to call you offering bad credit loan deals by phone. It’s a violation of the Federal Law. Furthermore, be careful about answering questions from agents who may try to get your personal information over the phone.

7. A loan company without a physical address.

   Be wary against bad credit loan providers that only offer services through the internet. It is too easy to create a phony website and pretend to be a legitimate company. As much as possible, you should make the effort to personally visit the loan company’s office and meet with its representatives.

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