Moving past an adverse credit record with a bad credit loan from a leading lender

Anyone can face financial constraints and cash emergency situations at any time. In need of money, you would need a loan. Unfortunately, no matter what kind of loan you intend to apply for, majority lenders always look at your credit report. In most cases, your financial history is the deciding factor on loan approval.

Understanding how bad credit affects you, and how to improve it

If you intend to take out a loan, the first step should always be ensuring a clean credit score. You should request your credit report from your financial service provider and assess it thoroughly. By paying outstanding debt, you will improve your credit score.

If you have missed payments in the past, you should take the time to fix that and make a conscious effort to repay the money you owe. Credit reports can be requested or provided freely when you are unemployed or trying to look for a job.

You can also request it within three months of rejection from lenders. A credit report is very important, and it is recommended that you review your report once every year.

There are bad credit limitations

Bad credit history also results when you get rejected for other reasons once and apply before the six-month period is over. The reason for rejection could be a failure to provide important documents or anything else other than non-payment.

If you are refused once and you re-apply in the same time frame, you would be rejected again. It is advised to reapply in 6 months and take advantage of the time to take corrective action and improve your credit score. Continuous applications will result in repeated rejections, which reflects negatively on your credit report.

Debt counselling has helped thousands of consumers

If you already have bad credit and you are unsure about the next step, you should seek debt counselling services. Professionals in these organizations have strategies to aid you in the best possible way.

The UK has several debt counselling services; StepChange Debt Charity, Citizens Advice Bureaux and National Debt Line. If your credit history is beyond repair, it is still not the end.

It takes 6 years under County Court Judgement (CCJ) for your credit report to be removed from any negative credit history. And eventually, your financial report becomes spotless.

Keeping safe when you are in bad credit

Individuals with a negative credit history are always in a financially compromised situation. But there are lenders in the UK that offer affordable loans to people with bad credit.

Even in bad credit you must stay away from such lenders and make sure that the offer you are being made is legit and beneficial in the long run. Most importantly, you should know if you would be able to pay back the loan and would not need to miss any repayments.

You can also have fraudulent organisations under the pretense of debt counselling services, promise to make your financial history spotless. Such companies offer you a clean record for a ridiculous amount of money.

You should not be misled and pay such organizations and steer clear from anyone offering big rewards for big bucks. These lack legitimacy and only intend to take advantage of your situation.

You have options!

When in bad credit, you can often get approved for unsecured loans. These do not require you to put an asset as collateral but since the lender needs some sort of security, interest rates are high. At times, these loans can be difficult to afford.

Some lenders offer secured loans to those who have assets that can be placed as collateral. These assets would be properties or vehicles. The interest rates are considerably lower, and these loans are less expensive than unsecured loans.

You can still get credit with a poor credit score

If you possess a car, you can take a logbook loan. These are readily available to clients with bad credit. If you have valuable items, then you can opt to pawn your possessions in return for money. However, if you fail to repay, then you lose your valuables.

If the above options fail, you can consider a guarantor loan. This falls under unsecured loans, where your family member or a close friend signs the agreement as your guarantor.

This person is a co-signer who along with you, and as a result, also takes responsibility for the repayment of the loan. They also make repayments on your behalf to ease the burden on you and help you pay off the loan faster.

Have you heard of debt consolidation?

Debt consolidation must also be considered. In this case, all debts are combined into one loan and one repayment is made on a regular basis. This helps better management of your finances and helps you save more money, speeding up the process of repaying the loans.