Having a poor credit rating will inevitably make getting a loan rather difficult for you. You’ll find it more difficult to get an affordable interest rate. However, we at Loan Brokers UK are specialists in bad credit loans and can help you get a reasonable loan rate with a manageable interest rate.
What to do?
Check your credit rating
You should regularly check your credit rating, especially if you’re already in debt. Checking your credit rating will help you track your eligibility, it is a good safeguard against fraud. You shouldn’t be too worried about over-checking your credit, as long as it’s you checking your credit, your credit score won’t suffer.
Use a good loan comparison service
One thing we do better than almost anyone else is to provide a good personal loan comparison service. We will go through many different lenders to find a deal that’s right for you. Our specialised algorithm will make the right choice for you, saving you time as well as money.
Don’t stop applying
Different lenders have different opinions on how risky you are. You shouldn’t let a couple of rejections discourage you from finding a willing lender.
What types of loan might I be offered with bad credit?
If you have bad credit, you will be better off using personal loans. The main reason why you should use personal loans is that they are unsecured, this means that they do not require collateral to receive it. Your car, home or any other asset are all safe. While you will face financial consequences, you will not be risking your home or any other asset.
Especially for larger loans, personal loans will often come with a lower interest rate than a credit card. Also, using your personal loan to consolidate loans will also lower your overall interest payment.
Personal loans will also offer you more flexibility on how you can use the loan. You will also be paying lower interest rates and be able to borrow a higher amount, especially when compared to credit card loans and guarantor bank loans.
While it may be easier, we strongly advise against using pay day loans. The amounts on offer are lower and you will be paying for too much interest. Also, these loans raise the suspicions of mainstream lenders. Therefore, they can increase your chances of being refused a mortgage.
Can I get entries removed from my credit report?
While getting bankruptcies and other legitimate entries are almost impossible to have removed from your credit report, there are other bits of information that you might be able to have removed. County Court Judgements (CCJs) can be removed from your file if you pay off a fine within one month. They will even issue a certificate of cancellation for you. The ruling will be removed from your public record as well as your credit report.
You can also ask for a goodwill adjustment for missed payments. If you are a long term loyal borrower, your lender lender may consider removing a one-off missed payment from your credit report. We advise that you ask for ‘a goodwill adjustment’, which will erase a late or missed payment. You’re more likely to be granted a goodwill adjustment if you promise to take steps to avoid this happening again by arranging a direct debit payment.
Furthermore, it is also important that you have mistakes removed from your credit report as soon as possible. You can have mistakes amended in the following situations:
- The debt is not yours, either due to fraud or if you were acting as a co-signer
- If you can prove that the debt wasn’t yours
- If you have ever received a loan when you shouldn’t have
- If the default date of the loan is incorrect
Sometimes you can simply wait out a bad entry, the normal waiting period is 6 years, after which your credit score will improve. The positive news is that the effect of a bad entry lessens over the time.
Overall, although it is significantly harder to get a reasonable loan with bad credit, there are many basic things you can do to improve your credit report. Furthermore, our experienced brokers are always on hand to give you professional advice and widen the scope of your choices.