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.

Is There Such Thing as Having Too Bad Credit to Get a Loan?

Is There Such Thing as Having Too Bad Credit to Get a Loan?

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Understandably, a lot of people who have a less-than-spotless credit record – perhaps because of them having failed to pay back loans on time in the past, or having had a county court judgement (CCJ) made against them – worry that they might be effectively barred from obtaining credit again altogether.

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But in your case, is it possible that your credit situation is so bad, you can’t hope to be able to get a loan at all? Below, we have taken a closer look at this question, because it’s a slightly more complex one than you might think.

First Things First… There Is No Such Thing as a ‘Credit Blacklist’

First Things First There Is No Such Thing as a Credit Blacklist

If you’re reading this because you’ve heard previously about there being a “credit blacklist” and wondered whether you might be blacklisted, we have some good news to share with you: the “credit blacklist” is a mere myth.

Before considering a loan, it's important to assess your current financial situation and understand the responsibilities and risks associated with borrowing, especially if you have a history of bad credit.

Part of the reason for this, is that each lender will have their own criteria that they will use when determining whether to lend to a particular loan applicant.

Indeed, some companies out there specialize in making available loans for bad credit in the UK. For such companies, it would obviously make little sense to operate by a universally applicable “credit blacklist”, as such a blacklist (if such a thing existed) would presumably include many of the people they would be open to lending to.

So, Does That Mean I Will Be Able to Obtain a Loan, No Matter What My Credit Situation Is?

So Does That Mean I Will Be Able to Obtain a Loan No Matter What My Credit Situation Is

While we can connect you with lenders who specialize in loans for those with bad credit, it's crucial to understand that approval is not guaranteed and depends on each lender's criteria and your ability to repay the loan. Lenders are required to conduct affordability assessments to ensure you can comfortably repay the loan without falling into further financial difficulties.

This might give you all the more reason – if you are looking to compare loans for bad credit in the UK – to apply through a reputable credit broker such as CashCompare, instead of approaching lenders directly, one by one.

Using our service would enable you to draw upon our extensive panel of lenders through a single no-obligation application – and that, in turn, could help maximize your chances of first-time success.

A Few More Things We Ought to Mention…

A Few More Things We Ought to Mention

…we’ve mentioned that there’s no such thing as a general “credit blacklist”, but there are certain other potential circumstances in which someone might struggle to obtain credit, or may not be able to do so at all.

If, for instance, you have been declared bankrupt within the last 12 months, all lenders will be legally prohibited from lending to you (no matter how willing they might otherwise be to do so). Bear in mind, too, that if you get a CCJ made against you, it will remain visible on your credit record for six years, unless you are able to pay it off within a month. Unlike the situation with bankruptcy, lenders aren’t barred by law from lending to you if you have a CCJ on your file; however, most lenders won’t be prepared to approve your loan application if they do notice this.

Failure to repay a loan can result in serious money problems. For help, go to Money Advice Service.

To summarize, then – yes, in theory at least, there might be such thing as your credit being so bad that you find it almost impossible (perhaps even impossible) to obtain a loan, at least if you don’t look to companies that specialize in loans for bad credit in the UK.

For the vast majority of people, however, their exact situation is likely to be somewhat more ambiguous than that. To find out more about the kind of short term loan that might be available to you in your present credit situation, don’t forget that there’s always the option of filling in and submitting our no-obligation loan request form, right here at CashCompare. CashCompare acts as a credit broker and not a lender. We are authorized and regulated by the Financial Conduct Authority.

"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.

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