Many people believe that a credit rating will only affect you when you are trying to take out a sizable loan to purchase a home, car, or new business, but they fail to realize that it affects more than simply whether or not they can qualify for that loan. It can also have a huge impact on the interest rate that is offered if you do qualify for that loan. If you have a poor credit rating, it tells the creditor that you, for whatever reason, were unable or unwilling to repay previous loans according to the terms set out by the creditor. In their eyes, this makes you a higher risk candidate than someone with a good rating. As such, should you qualify for the loan, you will be given a much higher interest rate than someone with a clean credit history.

Source: How to Get Very Bad Credit Loans

Anybody whose credit score is under 600 or so is really in a situation where they'd be classified as having bad credit. You're not going to qualify for any kind of home loan (especially in this lending environment), and you're probably not even going to get any credit card companies to approve you for that little piece of purchasing plastic.

So if you're the person I'm describing, how are you supposed to obtain short term financing when cash runs out before bills do? You're probably going to need to look into personal loans for bad credit. They're not exactly a good option, but they might be your only option, so just make sure you get the best one possible.

That means taking out loans that are not one cent more than the amount you need to make it through the month, and it means making your payments on time, every time. That's your only hope for improving your credit.

Both Stafford and Perkins lending standards are much looser than other lending institutions and they are backed by the federal government. However, these loans are only available to people who can qualify. If you are not able to qualify for a government subsidized loan, you may need to apply for a private loan through another lending institution.  Stafford and Perkins loans are specifically designed to make funds more available for college students to pay for their education, even if a student does have bad credit.

There isn't a huge need to students to find bad credit student loans if they can qualify for these two types of loans. Anyone can take them out and they work regardless of credit history. I personally never took them out because I qualified for Pells grants but they are a great options.