If you want to get a loan but are feeling trapped because your credit rating is not up to scratch, don’t be too downhearted as your chances of getting your hands on the money you desire may be better than you think.
A bad credit score may not be insurmountable as there are a few specialist loan lenders who have specifically created products targeted at people who have a challenging credit profile.
However, with these so called ‘bad credit loans’ there is a catch. Because your credit history has been blighted somewhat, lenders perceive you to be a risky bet, and even the specialist lenders will want appropriate recompense, so you’ll have to pay a pretty steep price for the luxury of being approved for a loan. The interest rates with these types of loans are appreciably higher when compared with those on offer to people with an unblemished credit history.
Specialist lenders are more inclined to say ‘yes’ to people with low credit scores where others may have said ‘no’, nevertheless they will need to convince themselves that you are borrowing what you can afford to repay and that borrowing will not inflame your current predicament.
Ultimately you need to ensure you can comfortably afford the repayments on any loan you take out as you wouldn’t want to get youself into more difficulty and jeopodise any chance you have of rebuilding your damaged credit file.
Target your applications
Knowing you have a less than ideal credit score means you can target any applications for a loan with those companies more likely to accommodate you and this site gives you access to a selection. Applying for a personal loan with the lowest rates of interest will be foolhardy as these products are reserved for the chosen few who have excellent scores. The lender is likely to swiftly jettison anyone applying for one of these products who has anything untoward on their credit file.
Whatever it was that got you into financial bother may now be a thing of the past, but it will blight your ability to borrow for a few years to come. Typically blemishes such as late payments, defaults and CCJs will lurk on your credit report for around 6 years from when they first became listed. You need to to tread carefully and borrow sensibly, keeping up with the repayments and taking all necessary steps to ensure your credit rating is on the road to recovery. In the current financial climate there is a lot riding on how good your credit rating is.
Watch out for the loan scams
It seems an increasing number of people are getting caught out by bogus loan companies who claim to be able to secure you a loan in return for you paying an upfront fee. Often these firms take your money, you never hear from them again and they cannot be traced. A common tactic employed is cold calling, often using the name of a genuine outfit, but in fact they are masquerading.
It can be a bit of a minefield sorting out the legitimate firms from the unscrupulous, but there are a few measures you can take to minimise your risk.
One is to be wary of any firm asking you to pay fees upfront. Many of the genuine firms will charge a broker fee only once the loan has been approved and this is often bundled in with the loan. Secondly, be extremely cautious of a company claiming to be able to offer you a loan by phone, text message or email. If you’ve not made an application and have been contacted out of the blue, you should see this as a clear sign that all may not be as it seems. In this case it is probable you have been contacted by fraudsters as authentic firms don’t offer loans over the phone alone.