Loan with a bad credit history – is it possible?

When a person has a bad credit history, obtaining a new loan may seem almost impossible. Still, financial circumstances change, and with them, the need for additional funds. Whether you have missed loan payments in the past or were unable to repay previous loans on time, the question often arises: “Can I get a loan with a bad credit history?” In this article, we will explore the possibility of obtaining a loan with a poor credit record, what a bad credit history entails, and what options are available in Bulgaria in 2025.

What is a bad credit history?
A credit history is an official record of an individual’s financial behavior, containing information about all the loans and credits taken over the years, as well as how obligations were met. It includes both the amount of loans and the manner in which they were repaid. Any late payments or defaults may be recorded in the credit history and affect your credit score (CSR). Failure to repay obligations on time or missing several installments in a row will negatively impact your CSR and result in a poor credit record.

A poor CSR signals financial instability or past difficulties in repaying loans, including late payments, overdue debts, and cases that may have required debt collection. It may also result from unpaid loans, legal proceedings for debt recovery, or defaults.

Problems with credit history can significantly affect your ability to obtain future loans. Financial institutions use the CSR as a primary indicator of lending risk. The lower your credit score, the higher the perceived risk for the lender, and the less likely you are to be approved for a new loan.

Additionally, a bad CSR can lead to higher interest rates and less favorable terms if you are approved for a loan. Therefore, it is crucial to understand how your credit history is formed, which factors affect it, and how to improve your financial behavior to regain lenders’ trust.

How to minimize risks when taking a loan with a bad CSR
Before taking a loan with a poor CSR, it is important to be aware of potential risks:

• Higher interest rates: Loans for individuals with poor CSR typically carry much higher interest, making repayment more challenging. Ensure you can manage these additional costs.
• Debt risk: If you fail to repay on time, you may enter a debt spiral, complicating your financial situation further. Make sure you can meet repayment deadlines.
• Unclear terms and extra fees: Some lenders may offer unclear conditions. Always read contracts carefully and check for all fees and terms to avoid surprises.

Can I get a loan with a bad CSR?
Yes, it is possible, but options are limited, and conditions are stricter. Lenders use the Central Credit Register (CSR) as the main tool to assess creditworthiness. A bad CSR indicates higher risk due to past difficulties with repayments, including late payments, overdue loans, or uncollected debts.

Banks are generally conservative and rarely lend to individuals with a negative credit history. However, alternative non-bank financial institutions increasingly offer loans without CSR checks or with more flexible terms, especially for small amounts and short terms. They often compensate for the higher risk with higher interest rates, service fees, or collateral requirements, such as a guarantor or security.

Private lenders and financial platforms may also provide loans based on a broader evaluation, including income, employment, and assets. Personal circumstances like temporary job loss or health issues may also be considered.

Before taking any decision, compare all available offers, both bank and non-bank. Platforms like Trusti.bg allow you to view multiple offers in one place and select the best option based on your financial situation.

If you cannot currently obtain a loan on favorable terms, focus on improving your credit history first by repaying old debts, negotiating debt restructuring, or consulting a financial advisor.

Options for obtaining a loan with a bad CSR

• Fast loans (short-term loans): Popular for individuals with bad CSR, focusing on identification and income rather than detailed credit history.
• Consumer loans without a guarantor: Offered by some lenders even with bad CSR, though interest rates may be higher.
• Loans with higher interest rates: These may be suitable if immediate funds are required, but repayment can be costly.
• Loans from private lenders: Often more flexible, though they may charge high rates and fees.
• Low-limit credit cards: Easier approval, minimal CSR checks, quick access to funds.

How to increase your chances of approval with a bad CSR

• Repay old debts: Clear overdue obligations and maintain new loans properly to improve your credit record.
• Offer collateral: Some lenders approve loans with collateral (property, car), reducing their risk.
• Apply for smaller loans: Smaller sums may increase approval chances.
• Choose lenders that don’t conduct detailed CSR checks: These lenders rely on other factors like income and security.

Taking a loan with a bad CSR may seem complex and risky, but options exist. Fast loans, loans without guarantors, and private lenders are viable choices. Carefully consider risks and select manageable repayment terms to avoid further debt.

Platforms like Trusti.bg can help you find suitable loan offers, compare conditions, and choose the best option according to your needs.

Author: Vasilena Cholakova, Executive Director
Vasilena Cholakova is co-founder and CEO of Trusti.bg with extensive international experience in strategy and data analysis. She previously led Uber Eats strategy in EMEA and worked at Covestor (now Interactive Advisors) and the European Commission. As a Trusti.bg blog author, she shares knowledge and practical advice on insurance and personal finance.