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Credit scores play a vital role especially when one wishes to avail a loan. Lenders will look into the credit scores of an individual and having a fair credit rating does not necessarily mean the end of the world. Lenders usually go by the FICO score of the loan applicant. If the FICO scores are in the range of 600 to 720, then the individual is considered to have "fair credit" and availing a loan will not be impossible.
While securing a loan it is not just the credit scores that the lender would be looking at but a whole lot of other details as well such as the proof of income, the type of loan that is being requested, loan to value (LTV), zip code etc. Having a steady income is an added advantage while availing a loan as the lender will be assured that there would be no issues with regard to repayments.
Many times there might be errors in the credit reports and most people are unaware of the fact that there could be errors on their credit reports. This is simply due to the fact that people don`t take the trouble to verify the details in their reports. One is entitled to get a free copy of their credit report from the three credit reporting agencies, once a year. These reports can be obtained online and the same must be verified. If any discrepancies are found then the matter should be reported immediately to the concerned agencies. This is normally done free of cost and one must avoid any company that claims to make these corrections for a fee as that may be a scam of some sort. One can easily increase their credit scores by identifying these errors and getting them rectified.
Lastly, one needs to decide on the type of loan that one wishes to avail. It could be a secured loan or an unsecured loan. Secured loans are less risky for the lender because these are generally mortgages or auto loans and in case of default the lender can always seize the property. Whereas unsecured loans are more risky for the lender as they can`t take away any of these possessions in case there are issues with repayment.
Hence having a "fair credit" does not mean the end of the world with regard to securing a loan. With a few steps taken in the right direction one can easily go up with the credit rating.