Ensure that you choose the right loan lenders when you have bad credit
There are many people in the UK who are looking to obtain a loan, and there are various reasons why people want to. No matter what the situation or the specific need, a personal loan can be the fastest way to get cash.
However, bad credit is a common problem for many UK borrowers. Having a bad credit rating can be due to a number of reasons, lack of any credit history i.e. you haven’t ever had a credit card or loan, or due to past problems such as unemployment, illness or an increase in your outgoings which made you unable to repay your previous credit cards or loans.
Many people find out that they have a bad credit rating, due to debts that they totally forgot about, or debts that they had settled (albeit late) and this is affecting their credit file.
The key is to ensure that you’re always aware of your credit rating. This can be achieved by gaining regular access to your credit file to ensure that you can keep track of finance options available to you should you need them.
You can obtain access to your credit file directly with equifax.co.uk or via third parties such as checkmyfile.com or noddle. The latter gather information from the credit reference agencies and with this formulate all of the data to show you what creditors see when they run a credit check on you. From this credit check they then decide based on their own criteria whether you are a suitable candidate to lend money to.
If you do have a bad credit rating, but you can afford to repay a loan or credit card, then you need to make sure that you only apply with those lenders that stipulate that they consider applications from those with a bad credit rating. These loans will be at a higher interest rate, so bare this in mind when applying. If you apply carelessly with unsuitable lenders (lenders that require a good credit rating) then you will only be rejected for the loan, which will worsen your credit rating.
As with all forms of finance if you do not repay on time your credit rating will worsen.
On the brighter side, if you are approved for a loan and you have a bad credit rating, repaying it on time will naturally improve your credit rating, which will allow you to apply with high street lenders and gain access to better and cheaper deals in terms of interest rates etc
So even if you may think that there are no options available to you when you have bad credit but it is necessary for you to obtain loans or credit cards there are still quite a few options available to you, you just need to look in the right places and apply with the right loan companies.