Bad credit rating? Apply for the right loan
Apply For A Bad Credit Loan
Discovering that you have a bad credit rating usually occurs when you apply for and are subsequently rejected for a finance by way of loan and credit cards.
When this happens, panic usually sets in and the borrower is likely to seek other lenders on the internet and apply in the hope that they will be approved for a loan or credit card.
This is a common mistake, a mistake that will only worsen a bad credit rating. Therefore if you are rejected for a loan or credit card, the first thing to do is get hold of your credit rating to find out the cause and to get a better understanding of your current situation.
Accessing your credit file is easy. There are an abundance of online tools available that allow you to register online and get an instant view of your credit rating. Many of these online tools offer a one off fee or an ongoing subscription fee, but there are some free services online, however the information that will be accessible maybe limited. Once you have your credit file in front of you and you know your credit score, you can then go back to your search for a loan or credit card, making sure to only apply with lenders that clearly state that they accept applications from those with a bad credit rating.
Applying with these lenders, means that you are more likely to be accepted for the finance that you need. Likewise continuing to apply with high street lenders will only result in a rejection which will further impact your status rating.
Once you have secured the finance that you need, the next step is to try and rebuild your credit rating. This can be achieved by ensuring that you repay your loan or credit card debt on time every month. Each time you repay your debts on time you are aiding in improving your credit rating, meaning that the future lending options available to you will be cheaper and more varied. Likewise failure to repay your bad credit loan or credit card on time will have a bad effect on your credit rating.
If you are not accepted by a bad credit lender then it is extremely likely that you will be declined everywhere that you apply and doing so will do further serious damage to your credit rating. It also signifies that a loan or extra finance is in reality unaffordable to you, and that you should look at ways to save for the item that you need the loan for. If the intention of the loan was to consolidate other loan or credit card debts and has been rejected because of a bad credit rating you can contact your local Citizens Advice Bureau or the Money Advice Service for advice.
3 Advantages of Short Term Loans When You Have Bad Credit
When you need to borrow money to finance a purchase such as a new fridge or washing machine and you have a poor credit rating, it can be difficult to be approved for a loan. This is simply because lenders have certain criteria that you have to meet in order to be considered for a short term loan.
The majority of high street lenders request that you have a good credit rating, however there are some lenders that will consider applications from those with a poor rating. Therefore it’s important to seek out those bad credit lenders, instead of applying with high street lenders as you’ll only be declined, which will further damage your credit rating. You can do this simply by typing ‘bad credit loans’ into your favourite search engine.
The main advantages of short term loans for people with bad credit are;
1. Easy application with fast approval. As there is a healthy market for such loans, many lenders that consider application from those with poor credit make sure that the process is as simple as possible. The online applications are usually hassle-free, and only take minutes to complete. After the lender approves the loan application, you can find your money that you requested deposited directly into your bank account as little as one hour.
2. Short term loans allow you to repay the loan in shorter duration. Even though the loan duration varies and depends on the individual lender, short term loans provide financial support for an immediate expense. Some see taking on short term loans as an opportunity to improve their credit score in a short period of time, then after the credit score dramatically improves, that’s the time they take on a new loan which has a lower interest. Please note that in order to improve your credit rating, you will need to make the loan repayments on time for the duration. Not doing so is likely will lead to charges, and have a detrimental effect on your already poor rating. A short term loan allows you to repay the small loan in a shorter amount of time and saves you from burdening your finances for longer duration.
3. Though lenders charge higher interest on short term loans, if used wisely and repaid on time, they can help you to get back on your feet, without the pressure of having a longer term loan to contend with for a longer duration.
As always before taking out any type of credit please ensure the repayments are affordable as failure to make payments or be late with payments can affect your credit file.