There is this ugly myth engulfing our society that anyone that has previously filed for bankruptcy or has a poor credit history will never be able to get another credit card, car loan, or a mortgage on a home. This myth may have been true in previous generations and it is perpetuated now through incorrect and incomplete information that is threatened by ruthless collections agencies. The truth is, even people with terrible credit or recently discharged bankruptcies can still get a credit card, personal loan, or a mortgage for a house.

The key to achieving your personal financial goals when you have poor credit is in understanding that though the credit doors are not closed forever to you, you will simply be going through a different set of doors than those that have good credit. Your experience in getting a bad credit loan will be based on the nature of your previous credit problems. Some of your history will affect all borrowers with bad credit, but depending on your specific situation will vary in significance.

One thing you can bank on, is that you will experience higher interest rates. It is going to cost you more to borrow, and this is a fact you have to live with if you want a personal loan with poor history. An interest rate is calculated by taking the general nationwide rate when the application is received, and the overall risk of the loan in question. A lot of people are offended at this notion that they will pay more, but the fact is, you have proven yourself to be a higher risk for a loan and it is going to cost you. To secure a loan to an individual with a poor credit history, the lender wants a certain incentive when they are risking their own funds. This incentive comes as a higher interest rate. Because of this, there are some high risk loans that may not be available to you depending on how severely your credit is damaged. Lenders will draw a line in the sand as far as the extent of the risk that they can take. Further, they cannot raise your interest too high due to usury laws restricting them from how much interest they can legally charge you. The types of loans you will see here are unsecured personal loans and most major credit cards.

If you are trying to reestablish a good credit history after some financial setbacks, look first at getting a secured credit card or secured loan. If you have a vehicle that is completely paid for or some other asset that is worth money you can use this to get a secured loan or credit card. Banks will see this as less of a risk when you secure an asset against a loan, as they will have collateral against you in the event of default. This is the best way to reestablish yourself after poor credit problems.

Though this may seem bleak to you, remember your doors are not closed. It will just take you a little longer to get to the place others are at in terms of good credit. It is time and diligence that will get you back into the world of good credit. Don't lose faith, and good luck!

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The author - Ajeet Khurana - writes on finance topics, among others. He recommends: Bad Credit Loans and Loans and Credit Cards.