bad credit

Why Does Bad Credit Matter? And What Can You Do About It?

One of the biggest problems with a bad credit rating is the fact that it can seriously curtail your borrowing options. Most people would like to be able to borrow money for, say, a car or a house. But with a bad credit rating, you’re unlikely going to be able to do either, unless you want to pay enormous rates of interest.

Often a bad credit score is caused by things like defaulted payments, bankruptcy order or phone bills you’ve paid off late. What’s more, companies won’t go out of their way to share your credit report with you. Instead, most people only usually find out that they have a bad credit score when they try to apply for a mobile phone contract or a credit card and get turned down.

So how can you improve your score?

Check Your Credit Report

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It turns out that there’s a lot that the average person can do to improve their ratings. One thing is to make sure that your credit report is actually correct and that all of your debts are filed under your correct name and address. Often credit rating companies get details wrong, and in the process they adversely affect your credit score, sometimes blacklisting you when you haven’t done anything wrong. Ask to see your credit report and make sure that all the information on the report is valid. Hard inquiries can impact your credit

Apply For One Product At A Time

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Next, make sure that you don’t make a bunch of credit applications all at once. Credit rating companies are very sophisticated in their approach, and they know that if customers are making lots of applications, it probably means that they think that they don’t have much of a chance of being approved. Therefore, if you want to improve your credit score, it’s a good idea to apply for one product at a time and not immediately try to apply for another if you get rejected.

Use A Credit Repair Company

Credit repair companies are companies that specialize in improving your standing with rating agencies, helping you to secure loans in the future. Many of these companies will charge you money, so it’s a good idea to make sure that you choose a good one. Click here for more details on which companies are good, and which are not so good.

Prove You’re A Responsible Borrower

Another big way you can show that you’re a responsible borrower is to prove it by taking out a high-interest credit card. Paying off the balance on the card every month will demonstrate to lenders that you are able to manage your finances and pay off loans when required. Spend small amounts and then continue clearing the balance, avoiding any actual interest payments in the process.

Set Up Direct Debits

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Finally, it’s a good idea to make sure that you pay all previously agreed upon payments. Missing things like phone bills and utility bills can have an adverse effect on your credit score. If you struggle to remember to pay, set up direct debits.

Can You Get A Personal Loan With An Imperfect Credit Score?

Personal loan detailsHad it been a few years back, the answer would have been ‘No’. This is because, with a collapsed financial market in the forefront, no lender was ready to bear the risks of providing loans to people with bad credit scores. But things have changed today. With the market picking up pace at a slow yet steady pace, new-age lenders have now got a whole new range of loans for people with bad credit also. So are they overlooking the risks? Not really, since the higher interest rates are primarily charged to play down the perils involved in the niche, but by and large, they focus more on the needs of the people.

The answer therefore is an ‘Yes’ today, which means that even if your credit score is below average and/or not ‘perfect’ you can get a loan. A specific type of loan called bad credit loans, meant for people having imperfect credit scores have been formulated by certain lenders so that patrons with ‘below average’ or ‘bad’ credit scores are not entirely deprived of credit.

Why are lenders ready to provide ‘bad credit’ holders loans?

When lenders fork out loans to people, they are truly much concerned about the ‘risks’ involved in the offering…which obviously are more when the borrower is having bad credit. But yet still, they are not disinclined to the situation these days since they have found out that many of these people are dependable borrowers, who are just victims of job loss, financial loss or adverse monetary circumstances.  They also feel that this group deserves a chance to reinstate their credit scores by taking a loan, and also procure financial support as and when they need it.

In fact in many instances they have seen that these loan takers are more eager to adhere to stipulated repayment schedules as they are more ardent to rebuild their credit glory once more.

Who provides them?

Loans for people with bad credit are available with loan matching portals that have got bad credit loan programs on their portfolio, and has included in their list niche segment loan providers who specialize in the forte. Such a portal connects a prospective borrower to a suitable lender when the former fills up a form at the website (that explicates his/her loan requirements) and answers certain follow-up questions. For eligible candidates, loan approval takes a minute. It’s a smooth sail and nothing complicated. Rates and loan options can be checked, reviewed and compared by applicants for picking out the best offer.

Interest and repayment terms

Interest for bad credit loans are higher than what is charged for standard loans in the market, but not to the extent of being unaffordable. The key is to choose the right amount and the right tenure, as when a loan is affordable in terms of reimbursement and term, there are less chances of defaulting on its payments. Timely refund rather helps to lift up the credit scores of a bad credit borrower yet again and improve his creditworthiness for future loans.

Too low a credit score might however need rebuilding before you can apply for a loan.

Claudia Martinez is an expert content writer who writes for several blogs and websites including finance blogs.

Getting Approved for a Car Loan with Your Bad Credit Score

Getting Approved for a Car Loan with Your Bad Credit Score

Many people who have recorded a bad credit score are aware of the fact that they can no longer benefit from other loans. The bad image of your credit history has led to a bad credit score and until you fix it you can not take advantage of another loan. But have you ever heard of the possibility of availing a car loan even if you present a bad credit score? Well, I am sure that you haven’t, but if you keep on reading you will find out how this is possible.

First of all you should be updated with the fact that there is in fact a bad credit car loan specially designed to help those known as bad credit scorers. In this category fit also the IVA’s, CCJs, the payment defaulters, bankruptcy cases, arrears, and so on.

All these bad credit scorers must have previously applied for car loan with various lenders, but they have been turned down. This is the reason why these bad credit car loans have been issued as the helping hands for these bad credit scorers.

Now that you know that these possibilities are available for you, too, you should start looking for the terms. In this way you will find out that these…’special’ loans, let’s call them, come as secured, but also as unsecured loans.

With the secured loans, as you probably know already, you should present some sort of collateral to back up your loan, while the unsecured loans do not ask for any mandatory collateral. When benefiting of these loans you should learn that you can ask for an amount that is the same with the price of the car you want to purchase.

Once the loan will be approved you must be aware of the terms of repayment, and see if you can cope with them. Generally, the repayment terms for a car loan in your situation are from 2 to 5 years, depending on the amount you have borrowed. Do not overlook also the option of buying yourself an old car (no older than 5 years) while you avail the bad credit car loan.

Applying for a bad credit car loan you must present the following documentation: an up to date proof of being employed, a proof of your residential place and in some cases you might be asked as well to make some down payment.

Take notice of the fact that bad credit car loans have to be repaid in a relatively short period of time. Apart from this, you should always make sure that you will have the means to be on time with re-payments, keeping in mind the fact that interest rates will be set a little bit higher. This is why it is on your own advantage to first proceed into some online shopping and compare prices before reaching for the bad credit car loan that matches your needs.

5 Rules of Credit Card Management

5 Rules of Credit Card Management

Most people have a love/hate relationship with credit cards. While handing over that little piece of plastic feels painless at the  time, once the harsh reality of minimum payments and skyrocketing interest rates begin to sink in, all fun and games come to a sliding halt. If you follow 5 simple rules of credit card management, you can maintain your credit rating and increase your FICO score while still reaping all the benefits of having a credit card. Your credit card management style will determine your credit score life and once you have this under control, life will be that much sweeter.

1. Do not apply for or use store credit cards.

With a store card you are limited to store use only and it can bring your credit score down. Use major credit cards for all your purchases if you would like to work on building or repairing your credit. Just make sure you make your payments on time. These are the credit cards that help to maintain your credit score and keep you in good standing.

2. Read ALL the small print and make an effort to understand it.

You can’t rely solely on credit companies to advise you about the dangers and pitfalls that can happen if you don’t properly manage your credit card situation. Find out what the result will be for a missed or late payment, what happens if you cannot make a payment for one month and what your responsibility is in case of credit card fraud. You need to pay very close attention to how the interest rate works and if there is a cause out of your control when they can raise the interest rate without your knowledge. Being prepared ahead of time is key for properly managing your credit card debt.

3. Pay every payment on time.

Do not ever make a late payment. This can be the number reason they can raise your interest rate and make it more difficult to get out of a large debt. Watch the cycle date on your card and do not pay it before your next cycle date or after the due date. Always pay online or by phone and get your confirmation number. Accidents happen and a payment that is applied to the wrong account in the same family often will not be changed over and is counted as a double payment on one card and a missed payment on the right card.

4. Do not charge over your credit limit.

Most credit card companies no longer stop your charging at the limit. Once you go over the limit, there is an extra fee and the companies can increase your credit limit without your consent. Always be sure to keep track of how much you are spending so that you avoid going over your limit at all costs. The penalties for this are typically not worth the purchase that pushed you over the limit.

5. Do not request an increase unless it is an emergency.

Each time your request an increase in your credit limit or it is increased due to charging over your limit, the companies runs a credit check. This is another hit against your credit and can have an effect on your credit score. Be honest with yourself before making that call. If you are not in an immediate emergency then chances are you should not request an increase.

If you follow these simple guidelines you will be on the right track for credit card success. Just remember, the purchases you make today can haunt your credit score forever if you are not careful. Spend with care and in the end you will be very happy that you did.

Lisa is a writer for, a financial site which compares 0% interest credit cards and also rates the top loans for bad credit in the UK.

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