How Can You Improve Your Credit Rating?
If you have bad credit and are worried about being declined for a loan, there are sometimes some quick fixes you can do to improve your score.
For example, if you have not already, you can look at joining the electoral roll which confirms your name and address with the local government authorities. Credit reference agencies and lenders consider this to be a good trust factor because it confirms your name and location.
Other things you can do include closing any credit cards and store cards that you do not use – because it potentially shows that you have access to credit and could make your stretched financially.
Also, avoid making lots of loan applications in a short space of time. This is considered by lenders to be a bit of a warning sign that the individual is desperate for finance.
How is UnsecuredLoans4U Different?
At UnsecuredLoans4U, we act as a full market broker, so your application for a bad credit loan will be reviewed by over 50 direct lenders for bad credit and matched with the best one to suit you. Therefore, there is no risk of having multiple credit searches that might impact your credit score, nor do you need to try apply with companies over and over, waiting for a response.
Once you have completed the application in less than 5 minutes, you will receive an instant decision on the screen and if approved, customers can typically receive funds to their bank account in 1 hour or on the same day of applying.
What is a bad credit loan?
Well, just as the name would suggest, a bad credit loan is an option for consumers who either have no credit score or have one that is below average making it hard for them to qualify for standard loans.
Why would one want to get a bad credit loan?
Well, there are many reasons such as investments and other business expenses. The prominent reason though is by far emergencies. If someone in the family is hospitalised or your car breaks down then getting a loan is an obvious solution.
However, if you either have no credit score or have a sub par one then getting the money you need to resolve the emergency could prove rather difficult. That’s why lenders have been offering this option more and more like a path of relief to those who need financial assistance yet don’t have the credit score to back them up.
Why not ask family or friends instead?
One path that people take when unable to qualify for standard loans due to their credit score, or lack thereof, they tend to look towards their relatives and close friends for the financial assistance,
While this can be helpful in some situations, it’s ill-advised as a debt between family or friends could lead to resentment if payments are late. It’s unwise to jeopardise close bonds with your friends and relatives when you could just get a bad credit loan from an official lender instead without having to worry about family feuds.
Are interest rates higher?
Whenever you go to a bank seeking a bad credit loan you can expect that the interest rates they charge you will be higher than that of standard loans. That being said, there’s actually some logic behind this decision rather than disdain for the financially challenged. You see, when banks hand out loans to those with a low credit score or even none at all, they’re risking their funds as you may not be able to make payments consistently if at all.
By raising the interest rates, they increase their potential return on investment if you do manage to pay. This turns it into a high-risk high-reward situation rather than a high-risk equal-reward situation, with the latter making no sense to jump into in the first place. While you might find it unfair that those who have less need to pay more, it’s this very system that allows lenders to help those in need, so don’t be too hard on the banks — at least they’re trying.