If you have bad credit, for whatever reason - a lost job, unpaid medical bills, a divorce or death in the family - you probably know how difficult it can be to obtain a loan. Your options will be limited, and your interest rates will be higher, but there are ways to get the financial assistance you need, even with FICO scores that are down in the dumps.

How Bad Is It?

Before you do anything else, find out exactly what is on your credit report. If you have a common name, your credit could be co-mingled with that of another person. If you have old credit cards that went to collection, but that you paid off, they may still show as open. You can dispute incorrect information, and get the status of paid accounts changed to say PAID or CLOSED, but you have to know what's there. Chances are, your credit isn't actually as bad as you think it is.

If Your Credit Really Is Bad…

If your credit really is bad, you may still be able to get a loan, especially if it's for a car or a house. (Credit cards will actually be more difficult to obtain.) Here are a few options to try:

• Credit Unions: Unlike regular banks or mortgage companies, credit unions are member-driven. This means they're more willing to take loan applications on a case-by-case basis and see the real person behind the application and the credit score. If you sit across the desk from a real person who has to look you in the eye, you're more likely to get a loan.
• Peer-to-Peer Lending: Peer-to-peer lending services, often referred to as "hard money," are a good option for getting a loan with bad credit. Instead of borrowing money from a bank, you'll be matched with an individual investor who is willing to work with you. They may be more sympathetic to your plight, but they also aren't in business to lose money, and you should expect a short term and a higher-than-market interest rate.
• Friends and Family: While peer-to-peer lending helps you borrow from strangers, if your credit is really, really bad, borrowing from friends and family may be your only option. If you have a relative who can afford to make a loan, and is willing to do so, be sure you actually draw up a note, have both parties sign it, and have it notarized, to keep things on a professional level. If you don't have a family member who can help you with actual funds, you might have a family member willing to co-sign on a loan, but be careful with this, because if you miss a payment, you are messing up their credit, making your own credit worse, and straining your relationship.
• Use Collateral: Sometimes it helps to put up collateral - a physical object that can be claimed by the lender if you default on your loan. Equity in a home you already own is one form of collateral, as is a paid-for car, but there are risks when you go this route.

Be Careful

There are many disreputable lenders who make their living from taking advantage from people with bad credit who need loans. They charge incredibly high fees and make it almost impossible to pay things off. Three very common forms of these "predatory lender's" loans are payday loans (where you borrow against a future paycheck), tax refund loans (where you borrow against an expected refund from the IRS), and car title loans (where you put up the title to your car as collateral).