While relatively few of us have utterly immaculate financial histories, it is fair to say that for some of us, the money-related bumps in the road have been more severe than they have been for others. The fact is, bad credit can happen – but if it happens to you, does that mean you have almost no chance of obtaining a suitable loan for your needs?
"It's worth noting that people with very bad credit and those with significant credit challenges may still find loan options. In fact, if you have a low credit score and you do take out a small loan, the repayment of this over time could be an excellent way to show other lenders that you can be trusted to keep on top of your financial obligations. It can, then, help to build your credit score back up again, thereby potentially enabling you to access finance on more favourable terms in the future.
Still, there’s no denying that having a bad credit score can restrict your borrowing options. So, if you do turn to a broker that helps provide access to extremely bad credit loans – as we do here at CashCompare – what are some of the things you will need to bear in mind?
Yes, you could still get a loan, but the interest rate will probably be high
There’s no getting away from the fact that lenders do see borrowers with a poor credit score as a higher-risk prospect to lend money to.
So, if you can access finance despite having an extremely poor credit rating, you will need to budget for the effects of a higher interest rate than those with a better credit score are able to access. This gives all the more reason, then, to get into a routine of always keeping on top of your repayments.
You need to be sure that you won’t simply be worsening your situation if you take out a loan
As many people who have taken out payday loans in the past have sadly discovered the hard way, taking out a loan in order to boost access to funds on a short-term basis isn’t necessarily a brilliant idea from a longer-term perspective.
Whatever your reasons for seeking out extremely bad credit loans such as those our experts at CashCompare could enable you to access, it won’t be in your interests to take out a loan that you can’t afford to pay back. Missing payments would likely mean that your already-poor credit score takes a further hit, thereby making it even more difficult for you to access finance again in the future.
If this sounds like your situation, borrowing more money may not be the right solution for you, especially if you are doing so in order to pay off other debts. You could find yourself in a damaging debt spiral – in which case, it might be best to seek out other ways to improve your finances, such as cutting back on certain day-by-day, week-by-week, and month-by-month expenses.
Remember: your credit score won’t be the only factor dictating your ability to borrow
Even if you do have very poor credit and you have had discouraging experiences trying to get approved for a loan in the past, you should remember there is a broader picture than just your credit score that might be affecting whether your loan applications get accepted or rejected.
Indeed, here at CashCompare, we maintain relationships with lending partners that look beyond just the prospective borrower’s credit history when they are deciding on loan applications. By also considering such factors as the applicant’s current income and ability to repay, they can make a decision that helps the applicant in addition to protecting themselves.
So, to answer the question at the top of this article in one sentence: yes, you do have a chance of getting a loan even if you have poor credit, but you might need to be prepared for certain compromises.
We work exclusively with a selected group of lenders and brokers to offer you a range of credit and loan products. We may receive a percentage of the loan amount as a commission from a loan provider or broker if you take out one of their products and/or we may receive a fee for introducing you to them.
We do not charge you any fees to use our websites, services or products. Any commission received by us is paid by participating lenders or brokers if you choose one of their products or for referring you to them.
To find out more what could be possible for you, why not complete and submit our straightforward online form, which won’t oblige you to commit to any particular loan offer until you really are sure it would be the right solution for you?
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk. We are a credit broker and not a direct lender.