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Glossary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bad credit rating
Bad Credit Loans:
How to Get Finance with a Poor Credit History

If you have a bad credit rating or a poor credit history, then you may find it harder to take out finance products (such as mortgages, loans, and credit cards) than people who have good credit histories.

It may be that specialist products such as bad credit loans will be a better option for you in this situation or you may simply need to try and improve your bad credit rating to get better options from the finance sector.

Let's take a look at how a poor credit history or bad credit rating can get in the way of taking out finance products and how options such as bad credit loans may work as an alternative.

How to work out if you have bad credit rating problems

You don't want to find out that you have a bad credit rating problem via a lender who checks you out when you apply for a product with its company; you really do need to know BEFORE it checks you out, so you can get the best solution for your needs. Before you do anything then, take the time to check out your credit rating to see if you have a poor credit history.

This is easy enough to do; you simply need to check out your credit report with one or more of the three major credit reference agencies (Experian, Equifax, or CallCredit). You can subscribe to see your report online or order a copy to be sent out to you which will only cost you a couple of pounds.

This report tells you if you do have bad credit rating or poor credit history issues that could make you look like a bad risk to a lender. It may be that the information on your report is not accurate in which case you can have it changed. If the information is accurate, then you will at least know what lenders will see when you make applications.

Understanding a bad credit rating from a lender's perspective

Whenever you make an application for a financial product such as a mortgage, credit card, or loan, your lender will run a credit check on you with one or more of the leading credit reference agencies (as mentioned above).

This credit check will basically tell the lender if:

  • you are a good risk (i.e. if you have a good credit history)

  • you are a bad risk (i.e. if you have a poor credit history)

So, if you have Count Court Judgements or missed or late payments on your file, then you will look like a risk to them. This doesn't always mean that they will turn down your application, but you may be given higher interest rates or may be diverted to a bad credit loans product instead.

If you know your credit rating before you make an application, then you can take steps to keep it as clean as possible. What you may not realise is that every time you apply for a loan or other financial product the application will show on your record - if you get turned down by a lender then future lenders will take this as a negative and may turn you down themselves. This vicious circle can be avoided if you check out your record before making applications and if you ask for quotes first until you find a product to suit you.

Finance options for people with a bad credit rating

If you have a poor credit history then the chances of getting the best interest rates and deals are minimal. The higher the risk you are seen as being by a lender, the more you'll be charged for any borrowings. So, you may well be given the choice of paying higher rates with a mainstream lender or of taking out bad credit loans instead.

The choice you have really does depend on what kind of bad credit rating you have. If it isn't so bad, then you may find that a standard lender will work out best even though you'll have to pay a little bit more. If your poor credit history is a real problem, then you may be better off talking to a bad credit loans provider.  Bad credit loans have been designed to help people who have poor credit histories and less than perfect credit ratings get access to loans and other financial products. So, lenders here won't be so fussy about how your credit history looks!

Compare credit report providers

 
 
 
 
 
 
 
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