It is never easy when applying for a loan as lenders can be tough with exclusions. If you have a bad credit score, you might think it impossible to get a loan. However, if you allow us to help you find a loan some of the stress is taken away. Along with talking about loans for poor credit, we will show you how to improve your chances of obtaining loans for bad score.
Loans Most Suitable If You Have Bad Credit
Some loans come with a higher approval rate for people with bad credit ratings than others do. This is not because they are special loans tailored to people with poor credit. It is because they only offer a small sum of money and the loan is repaid back quickly.
Lenders will be more lenient with criteria if you only ask to borrow small amounts. That is not to say that they will not check your credit rating, they will. However, at the same time, they will also consider verifiable income and loan affordability. If they think you can repay the loan on your next payday or within three paydays, they are more likely to accept you.
Boost Your Chances of Obtaining Loans for Bad Credit Score
Before we look into two loans that often yield good approval results even for people with poor to bad credit scores let’s take a look at some things you can do to boost your chances of approval.
- Allow us to search for a loan for you with a panel of lenders.
By allowing us to search with a panel of lenders that have offered loans to people with poor credit ratings in the past you can boost your approval chances. We can search with an array of lenders from one application, again, improving your chances.
- Only apply to borrow small amounts of money and repay quickly
As mentioned above lenders are more willing to take a chance of someone with a poor credit score if they only want to borrow a small amount of money and can pay it back fast.
- Check your own credit file before applying
It can pay to check your own credit file before applying for loans for bad credit score so you can see what lenders see. At the same time, it may be possible that a mistake or two on your credit file has left a black mark and you get this taken off. This might be for a loan you repaid but which is marked down as not repaid.
- Make sure your name is on the electoral role
This is simple and easy to do and as it verifies your name, age and address to the lender.
- Are you connected financially to a person with bad credit
You may not have a bad credit rating yourself but be connected to an ex-partner who has a bad credit rating. If they missed repayments or have outstanding loans they have not repaid and you are financially linked to them, it can affect your credit file. If this is the case, apply for a “notice of disassociation”.
Apply for Payday or Short-term Loans
We talked about applying for loans that only offer a small sum of money and two of those loans are the payday and short-term loans.
The payday loan usually offers in the region of £100 to £500 and the short-term loan up to £1,000.
The payday loan is usually the easiest type of loan for people with poor credit history to find approval for as the loan is repaid within a period of one to three paydays.
Short-term loans can usually be spread out longer but they are not repaid over the long-term. A short term is generally up to 12 months with lenders.
Other loans options include a guarantor loan or secured loan but both come with disadvantages. These loans would allow you to borrow thousands of pounds but with the guarantor loan, you have to find someone willing to stand as a guarantor. With secured loans for bad credit score, you have to put your property or vehicle up as collateral against the amount being borrowed. If you cannot make the repayments, you stand to lose whatever you secured.
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