Bad credit unsecured loans - credit rating advice

Choosing and applying for a loan can be a daunting experience, but it can be even more complex and confusing if your credit rating isn't up to scratch.

Can I get an unsecured loan if I've got bad credit?

It is easier to get a secured loan than an unsecured loan if you have poor credit history or CCJs (County Court Judgements) because the lender knows he has your home as payment towards the loan if you default on your payments. An unsecured loan is riskier for the lender, and if you do not own any property but you have a bad credit rating, you may find that some lenders will not want to know you. Despite this, many lenders now specialise in 'high risk' loans and will not refuse your application based on a poor credit rating.

Why have I got a bad credit rating?

When you apply for a loan, or a credit card, or any other type of credit, an assessment is made based upon your personal circumstances. This is known as credit scoring. Lenders also use reference agencies to check your details and to carry out a credit search to find out what your financial position is. So if you have any county court judgements or have defaulted on other loan or credit card repayments, this will show up on your report.

But I've never borrowed money before and I'm still being refused credit. Why?

This is because you haven't built up any credit history, and your scoring is therefore very low. Try applying for a loan or credit card through an institution that knows your history, such as your bank or the company you work for if they offer financial products for employees.

How can I get hold of my credit report?

For a small fee you can apply to the credit reference agencies to obtain a copy of your credit file.

Is there anything I can do about my bad credit?

Yes, by paying all your bills and loans on time your credit rating will eventually improve.

 

 

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