You can actually use a bad credit loan to improve your credit. It may seem odd that you can improve your credit by taking on new creditors, but it's true. If you take out a bad credit loan and you are consistent in making your payments, you'll soon see your FICO score rise. The key is to be diligent in making your payments on time and eventually you'll improve your credit. Bad credit loans, although sometimes expensive, are worthwhile if you use them as a tool to improve your financial standing.