- - 6 Smart Ways To Get Approved for Loans and Credit Cards with a Low Credit Score

Cynthia MeasomJanuary 15, 2026 at 10:37 PM

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Historically, people with low credit scores struggled to get approved for most loans or credit cards, but things have changed. Now, lenders and credit card issuers are using alternative methods and data to evaluate applicants, opening the doors to more approvals.

Below, we’ll explore some of the ways even those without optimal credit are securing loans and credit cards.

1. Stable Payment History

Although many factors are weighted in an individual’s credit score, payment history is worth 35%.

Cynthia Chen, founder and CEO of consumer-focused FinTech company Kikoff, said factors such as consistent on-time payments on existing accounts and low recent delinquency can help demonstrate reliability.

“We also consider overall credit health trends, like improving balances or a history of keeping utilization low, which can signal the applicant is building stronger habits even if their score hasn’t caught up yet,” she explained.

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2. Cash-Flow Underwriting

Chen explained that lenders are starting to use cash-flow underwriting to see how someone manages money in real time as a method of approval. Cash-flow underwriting involves looking at a borrower’s cash flow data, such as bank account balances, current income, monthly expenses and debt payments.

3. Alternative Data

Chen explained that alternative data, such as rent payments, utility payments and a steady job record can help applicants get approved by certain lenders when their score is too low to stand on its own. Other alternative data sources lenders might use are child care, gig economy and buy now, pay later payments, according to Plaid.

4. Targeted Credit and Loan Products

Some financial products are designed for people rebuilding credit or starting fresh, said Chen, and give applicants a way in when traditional loans or credit cards may not. Examples she gave were secured credit cards, credit-builder loans, government-backed options like FHA mortgages, and services, like Kikoff, that help educate while improving credit.

According to Lending Tree, some credit card issuers look at applicants’ income and bank statements rather than their credit scores.

5. Scoring Models

Some lenders use newer, more inclusive scoring models, like VantageScore 4.0, according to Chen. According to VantageScore, this model has made it possible to score 33 million more Americans than was previously possible, offering a 10% lift for those with dormant credit scores and a 30% lift for those with no previous trade lines. The model relies on credit behaviors over time, instead of a specific point in time, as other models do.

6. Taking Steps To Improve Credit Before Applying

Chen said applicants with low scores can improve their chances of approval by focusing on what lenders weigh the heaviest and improving it. She added that bringing delinquent accounts up to date and keeping everything current are the most powerful ways to improve approval odds, but also pointed out that lowering credit utilization below 30%, fixing credit report errors, avoiding new inquiries and becoming an authorized user on a long-standing, well-managed account can all help strengthen an application.

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Source: “AOL Money”