A history of poor or bad credit does not prevent you from getting loans. In recent years, secured loans have emerged as one of the most sensible solutions for people whose credit scores have decreased after going through difficult situations.
Secured loans date back to ancient times; in fact, they were issued and managed before the introduction of fiat currency. There are biblical passages that mention loan contracts between farmers and merchants who pledged either their land or future crops as collateral.
Unsecured loans such as credit cards are relatively new forms of lending; the standard of lending around the world continues to involve some sort of collateral pledge, and this happens to be an ideal solution for people who have poor or bad credit these days.
In the United States, many people believe that they will not be approved for a loan unless they have excellent credit. The reality is that millions of Americans have FICO credit scores under 600, which means that many banks will not approve them for personal loans or credit cards. Thankfully, there are sensible lenders who still approve borrowers for traditional, secured loans.
The collateral requirement in a secured loan consists of pledging a tangible asset that the lender can file a lien against as a surety of repayment. In many cases these days, the collateral tends to be a clean title to a car or a boat.
At a time when many Americans are still recovering from the economic struggles of the Great Recession, secured loans are providing a reasonable solution for borrowers whose credit scores are not what they used to be. These loans can certainly help people in a time of need, and they can be easily approved with the right asset pledged as collateral.