Bad credit is something that can haunt people throughout their life regardless of how they got a poor credit rating. Obtaining a poor credit rating is a great deal easier than mending your credit rating. Even if a bad credit rating was earned decades ago, it can still cause issues with borrowing in the present and future. While a bad credit rating is going to make life difficult if you want a loan, there are some loans for really bad credit that you might be approved for more than others.
Three Credit Agencies Determine Your Credit Score
While you might think that your credit history is something that only you should know about, this is not the case. In fact, three credit agencies determine your credit score by snooping on your finances and collecting information.
The information they collect includes:
- Late or missed payments on debts;
- How much outstanding debt you have;
- How many credit accounts you have open;
- Whether you have CCJs;
- The percentage of credit you have used;
- Whether you are on the electoral roll.
All of this information goes towards them giving you points; it is these points that make up your credit score. The higher your credit score, the better the chance of you being able to borrow.
When you apply for credit, the lender looks at your credit file and credit score and determines how big a risk you are for repaying the loan. In regards to credit scores and leniency, some lenders are more lenient than others are. One lender may turn you down while another might approve the loan application.
It is not easy to obtain a loan with bad credit but it is not impossible. Here we are going to focus on loans that you might be able to get even if your credit score is bad.
What Choices of Loans For Really Bad Credit Might Be Available?
Anyone with bad credit might struggle to get a loan approved if they want to borrow many thousands of pounds and spread the cost of the repayments out over several years. Loans that are generally easier to find approval for with bad credit are:
- Payday loans;
- Short term loans;
- Guarantor loans.
To be eligible to apply for loans with our help you should be 18 years old or older, live in the UK, have a regular income, a bank account, debit card and be able to create direct debits.
We can help to match you up with a lender and we work alongside numerous lenders offering competitive rates and affordable loan options. Lenders will consider your credit rating but at the same time, they also focus on your current ability to be in a position to repay the loan.
Prove You Are Responsible With a Payday Loan
One of the easiest types of loans to get approval for if your credit rating is bad is a payday loan. This might be one way of getting your foot back into the doorway of borrowing with a poor credit rating if you only need to borrow a small sum of money and you can repay it back quickly.
Loans such as this can help you to meet any financial shortfall in an emergency. Payday loans are quick to apply for and generally, pay out the money on the same or next day.
This type of loan usually allows you to borrow only a small sum of money, which is repaid back quickly. You might expect to be able to borrow between £100 and £500 and repay the loan back over one to three months. While this is not going to be any good if you need to get hold of a large sum of money, it could be the answer to making headway with borrowing and rebuilding your credit rating. If you take out a payday loan and repay it in full and on time, this will go towards proving you are a responsible borrower and help you out in the short term.
Borrow Over the Short Term with a Short Term Loan
Whether or not you will be able to get approval for a short-term loan, is going to depend on just how bad your credit rating is.
The short term loan is a loan that is taken out over the short term, this is a period defined by the lender. While the term may differ between lenders, you might be in a position to borrow up to £1,500 with a short term loan and spread the repayments for up to 12 months.
Have Someone Guarantee the Loan with a Guarantor Loan
If you want to borrow a larger sum of money and spread the repayments out, but you have very bad credit, your only option might be a guarantor loan. This type of loan might be approved, as the lender is not taking such a huge risk as someone is guaranteeing the loan repayments.
The biggest benefit to this type of loan is approval may be easier to get, as you will have someone who will sign to say they are prepared to take over the loan in the event something happens and you fail to repay it.
The guarantor will need to be over 18 and have a regular income. On the downside is the fact that if you find you cannot make the loan repayments for whatever reason the guarantor is called upon to repay them. This can cause issues with relationships and friendship. It will also be another black mark on your credit file.
Loans for really bad credit can be applied for quickly and easily with just one single loan application. From your application, we can match you up with one of the lenders we work with, from our large panel of lenders. This means you do not have to keep re-applying with lenders and filling in the same details repeatedly. Each separate loan application you make can be recorded on your credit file and this goes against you. Apply with us and you will know within minutes if your application is successful.