Six ways to get a loan with bad credit Getting a home loan when you have a bad credit file is difficult, but there are some steps you can take to improve your chances of being approved. 1. Apply with a lender who does not use credit scoring Most lenders use a computer-based system called credit scoring to assess your home loan application, says Kim Wight, a Personal Mortgage Adviser with Smartline. "This means that the data collected in your application is given a rating or score and if the computer scores you as a bad risk, the application is declined before a real person has a chance to look at the application or hear your story as to why you have had credit problems in the past. In other words, 'computer says no'," she explains. "By applying with a lender who does not use credit scoring, your application -- and the reason for your past credit problems -- will be assessed by a real person, who can evaluate your personal situation past and present and use this information to make their decision on your application; it can be a case of, 'human says yes'." 2. Avoid mortgage insurance When you apply for a home loan, there are two approvals that have to be sought out if you borrow more than 80% of the value of the property. One is from the lender, and the other is from the mortgage insurer, who protects the lender in case you default on