- Better Borrowing (213)
- Credit History & Credit Future (30)
- Ditching Debt (41)
- Household & Family (177)
- Income & Work (60)
- Money & Finance (168)
- News (89)
- Property (52)
- Top Tips (106)
- Video & Infographics (30)
It is hard to get a loan if you are burdened with bad credit, of this there can be no doubt. Even if you have enough disposable income to cover the loan repayments, a poor credit rating or a poor bad credit history will still ensure that options are limited and borrowing is more expensive. Your credit history and consequently your credit rating still play a significant role in the lender decision-making process when receiving an application for a personal loan. The rate of interest (APR) applied to your borrowing and fundamentally, the decision on whether the loan application will even be granted at all will largely be determined by the previous credit behaviour of the potential borrower.
If you are viewed as a ‘high-risk’ borrower – if you have a history of defaulted Loans with Guarantors payments and CCJs (County Court Judgements) for example – there is every chance that the only accessible lines of credit will be loans that have been specifically created for bad credit borrowers such as guarantor loans. This is why it is crucial to check your credit rating before applying if you want to make sure you are eligible for cheap loans. You can do this online through the 3 main credit reference agencies in the UK, Experian, Equifax and Callcredit, though you may be charged a fee to view your credit record. By checking your credit report you will receive the opportunity to ensure that there are not any mistakes that will negatively impact on your credit scoring and also help to get an insight into the reaction that you are likely to receive if you make a loan application.
If you have a poor credit score or even no credit score at all, the sooner you begin to take steps to rectify the situation the better your financial outlook will become. Below are a few tips to help take some positive steps.
Following these steps will allow you to take significant strides towards repairing a poor credit rating.
Despite the difficulty posed to borrowers if they have a poor credit rating/history, it is important to note that realistic and attainable credit options do still exist and perhaps the best one to research is known as a guarantor loan. Guarantor loans are unsecured loans that utilise the presence of a second person who will act in the role as loan ‘guarantor’. Loans with guarantors are generally available over repayment periods of 1 to 7 years and the sums borrowed range between £1,000 and £12,000. They offer an ideal solution for people with bad credit, who would otherwise be unable to obtain a loan. Guarantor loans are not payday loans, the interest is much lower and you will not be charged any upfront or arrangement fees. They also offer the ideal opportunity to demonstrate the ability to maintain regular repayments, a crucial part of repairing a poor credit rating.
Amanda Gillam is Solution Loans's General Manager and has been since 2009. She is also a prolific writer on personal finance issues, and has been quoted numerous times in articles published on 3rd party websites and in press releases. Her...Read about Amanda Gillam
|cookielawinfo-checkbox-analytics||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".|
|cookielawinfo-checkbox-functional||11 months||The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".|
|cookielawinfo-checkbox-necessary||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".|
|cookielawinfo-checkbox-others||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.|
|cookielawinfo-checkbox-performance||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".|