| |
Poor Credit Rating
Loans: Get Loans & Improve Your Rating
As many as one in five people face problems applying for
a credit and it is not just the poor who can find lenders
less than willing to help. Anyone who has had credit problems
in the past will find their options severely limited. Others
might never have had credit before, but that in itself can
provide a barrier to obtaining credit.
When assessing a person’s application for credit, lenders,
look at two areas: the person’s credit history and their
credit score. Poor credit history will certainly amount to
a low or poor credit rating, but a clean credit history or
none at all, is no guarantee of a good credit score either.
As many as one in four people in the UK have some form of
adverse credit history such as late bill payments, defaults,
arrears, CCJs and bankruptcy. These people will have trouble
satisfying the credit scoring criteria used by many lenders
and individuals with a bad credit rating will be turned down
for a loan by many lenders. However, this company specializes
in arranging bad credit loans for people with a poor credit
rating, they have access to a number of lenders who are sympathetic
to people with impaired credit. As an independent broker they
are not tied to any particular lender and can advise on the
top deals available to you. Serious problems such as county
court judgments (CCJ), bankruptcy or defaults on a loan will
stay on file for six years; bankruptcies and CCJs are a matter
of public record, with details held by the courts.
Less serious, but still problematic is a history of missing
payments on a personal loan, credit card or a mortgage. Mortgage
arrears are given particular weight by lenders. A default
- where a lender has effectively given up chasing repayments
- is also extremely serious. One or two late payments on a
credit card might not be a problem. Typically, lenders will
only contact credit reference agencies once an account has
been in the red for some time, so being a day or two late
with a monthly payment should not create a black mark. Lenders,
though, are looking for habitual late payment: this suggests
the borrower is struggling to cope.
Multiple applications for credit, successful or not, can
be an issue. Each time someone applies for a card, personal
loan or a store card, the lender undertakes a credit search.
Each search leaves a "footprint" on the individual's
credit reference file. This is not necessarily a problem,
but too many footprints can trigger warning bells for lenders.
A poor credit rating will cost you money. The best credit
card deals are only open to people who meet the credit scoring
requirements set down by the main lenders. People with a poor
score, or a blemished credit record, will not be able to take
out mainstream credit cards.
Improve Your Credit Rating
If you ensure you repay each month so there is no charge,
after a year you will have built sufficient credit history
to enable you to move to a card with a more competitive rate
of interest. If used sensibly a credit can help you strengthen
or rebuild your credit rating. A bad credit rating can limit
your borrowing options. County court judgments, defaulted
payments and bankruptcy orders leave a black mark against
your name when trying to secure credit. Usually, the only
means of credit available in these circumstances is through
what is know as the sub-prime market, where would-be borrowers
are charged high rates of interest to reflect the perceived
risk to the lender.
| |
