Buying Furniture with a Bad Credit Score

Like it or not, credit scores often prevent us from purchasing the things we need most. One example of this is furniture. We need it when moving to a new place or starting fresh after a financial hardship. It sometimes gets broken, so we replace it. Buying furniture with bad credit can be challenging. This article will explain how to do it. Here are some of the key topics covered in this article:

• What furniture financing with bad credit looks like
• The pros and cons of in-store financing
• Smart alternatives: second-hand and refurbished furniture
• How to evaluate finance options for furniture responsibly
• Traps and terms to be cautious of when reviewing furniture loans
• How to improve your long-term purchasing power

Can you buy furniture with bad credit?

Furniture financing with bad credit isn’t as difficult as you might think. Before you attempt it, check your credit score. Visit FreeCreditScore.com, a service offered by Experian, to check it. You might also see your credit score on your bank account or credit card statement. It’s typically displayed in the top right corner.

Buying furniture with bad credit is possible, but it requires smart planning. Traditional lenders don’t generally collateralize furniture loans for lower-end merchandise, but they may approve you for a secured personal loan or unsecured loan with a co-signer. Unsecured furniture loans may be available from online lenders if traditional banks or credit unions won’t provide financing.

Other ways to buy furniture with bad credit history include in-store financing, rent-to-own plans, and buy now, pay later (BNPL). You could also take out a personal installment loan for people with bad credit. Several lending institutions specialize in these types of loans. Terms and conditions vary, so shop around. You might be pleasantly surprised by what’s available for you.

In-store furniture financing with bad credit

Furniture stores usually offer finance options for furniture. It makes sense. Their objective is to make sales, which could involve negotiating the price, bundling desirable pieces with other furniture, or offering financing that enables customers to buy what they need. There are pros and cons to doing it this way. Here’s a breakdown:

Pros of in-store financing

• Immediate access to needed furniture
• Installment plans may build credit if reported

Cons of in-store financing

• May involve higher interest rates
• Risk of deceptive terms

Be wary of “0% interest” promotions. That rate is usually for a limited time, typically six months to a year. Your monthly bills increase after that. Always read the fine print and shop around at different furniture stores. You must manage your money properly to complete the payment plan, especially if the lender reports to credit agencies.

Buying second-hand furniture

Consumers who prefer not to finance or find buying furniture with bad credit too difficult can buy used furniture at a second-hand store or yard sale. There’s an old saying that one person’s junk is another person’s treasure. Buying used means no financing and significant cost savings. Both are ideal for people with bad credit and limited cash flow.

Other places to shop are online marketplaces, local thrift stores, and consignment shops. Habitat for Humanity ReStores are another option. They’re independently owned merchants that sell “a constantly changing inventory of diverse, high-quality merchandise to the public at a fraction of the retail price.” You can also donate old furniture to them.

Refurbishing or repurposing old furniture

There was a time when only an experienced carpenter or woodworker could refurbish furniture. YouTube changed all that. Anyone can find instructions on how to repair, sand, prime, and paint used furniture. Several DIY websites and workshops can help cost-conscious renters and homeowners avoid the cost of buying new furniture.

While refurbishing is cost-effective, repurposing furniture can be practical and fun. That unused dresser could make a nice kitchen island, a bookshelf can become a shoe rack, and that coffee table your cat’s been eyeing could be her new bed. Pinterest has some cool ideas on this subject. You may see others when you visit other people's homes.

What to watch out for: Financial pitfalls when buying furniture with bad credit

Predatory lending is prevalent in any industry that sells higher-priced items. The auto industry is a good example. The furniture business is another. Watch out for furniture stores and online sites that offer deals that look “too good to be true.” Chances are, they are. Those long-term loans with low monthly payments usually come with high interest rates.

You can calculate the true cost of financing by multiplying the amount of your monthly payment by the number of months on the contract. Compare that to the price of the furniture you’re buying. You might be a victim of predatory lending if the payout is double or triple the sticker price. Revisit OppU’s Spending and Money Management resources to learn more.

How to prepare before you buy

Check your credit score and understand what it means. FICO.com provides information on how scores are calculated and the differences between levels. Once you know what to expect, set a realistic budget so you know what you can afford. You can start saving to reduce the amount you need to finance larger purchases.

Improving your credit can reduce financing costs and give you more purchasing options when you buy furniture. You can do that by paying off old debt and making new payments on time. Reevaluating your monthly budget could also help. Make a list of all expenses and eliminate those you deem non-essential. That should free up more discretionary money.

You have options, even with bad credit

There are always options when you need furniture, even with bad credit. Some lenders specialize in bad credit loans. Second-hand stores and thrift shops have hidden gems. You can even refurbish or repurpose furniture you already own. Consider these options and visit OppU for help with budgeting and expense management. Follow these steps, and you might be able to get the furniture you need sooner rather than later.