Emergencies happen, we all know that! We’re all human, and it’s no shameful thing to have a problem come up unexpectedly where the money is concerned. In times like these, loans can be a very sensible option that can save you money in avoiding late fees and extra costs.
The problem? For many, it’s being refused a loan due to bad credit scores. In cases like these, it’s a quick rejection by your chosen lender that leaves you stumped and still in need of cash.
We know that even if you have a poor credit rating, you still can have a legitimate need for financial assistance sometimes. In times like these, we’re here to help where others might refuse your loan request.
Some people have bad credit for reasons based on their past, such as failing to meet repayment obligations. Restoring your credit score can be challenging to do, and we think you should still have a good chance of getting a loan in the meantime if you need one. That’s where we come in.
What is a bad credit loan exactly?
As we established already, lousy credit loans are loans designed to help people who have poor credit ratings. Many lenders who offer payday or short-term loans will only do so to people who have a certain quality of credit rating. That is their decision, and it’s a common stance.
Bad credit loan providers, however, help more people more reliably. Their specific service is a loan that is designed to help people who would be refused a loan elsewhere. But, the actual loans service is essentially the same, which is to simplify the decision-making processes and requirements behind the scenes that are different from many other lenders.
In short, bad credit loan service is like many other loan providers with a twist – they offer loans to people who might be refused elsewhere.
Why you might have a bad credit history
There are many reasons why adults in the UK have bad credit histories, and it should not invalidate and stop them from getting a loan if they need one. Here are a few examples of why lousy credit history can happen.
You might have failed to pay an installment in time: This is a common one, and it can impact your credit rating significantly. If you have a direct debit arrangement for something like a car or even a phone subscription and miss it, your credit rating will often be affected negatively. These can build up to hurt your score.
Bankruptcy: This is a financial option available to adults in the UK, and it’s sometimes the right thing to do in extreme circumstances. It’ll massively affect your credit score, however, and will have long-term consequences.
You recently moved to the UK: This is a case of a lender or broker struggling to find enough information about you to make an informed decision. Your purchase history is essential information that acts in your favor in most cases when being considered for a loan, and an absence of spending history can translate to a bad credit rating.
Having just started your first bank account can lead to you effectively having a bad credit history. Loan providers are all about making informed decisions, and a lack of spending history can mean they’ll be less likely to approve your loan request when you make one.
Bad Credit Signs
- Paying too little
- Paying late
- Skipping payments
- Exceeding your credit limit
- Having an excess of debts
- It isn’t easy to borrow money
- Losing money on late fees
- Spending more money on financial charges
Can I get a loan for a small business if I have bad credit?
Companies with a bad credit score can be at serious risk. The main reason is that they could have big problems obtaining a loan, and they are exposed to having to accept harsh conditions that generate even more questions. However, there are times when getting that money is vital for the continuity of the company.
We want to clarify that it is possible to obtain a loan if you have bad credit, but you must bear in mind that it should never be at any price, even when it is vital for the business. Also, your main objective should be to improve your credit score, as it will be beneficial for your business at all levels.
What is the difference between personal and commercial credit?
The main difference between personal and commercial credit is the use of money. In the first case, it is used for particular issues, while in the second case, it is intended for any area of the business.
Another difference is the interest rate since commercial loans tend to be lower. It is also common for the amount granted to be higher when it comes to a business loan, and the term is usually longer.
We hope that helped!
So, this was a short, handy article about bad credit loans and how to secure them. You should check the service at Fresh Loan, which is the leading broker company in England. They will help you in obtaining a bad credit loan as per your eligibility and need.