In these days of economic hardship more and more people are affected by an adverse credit history making it difficult to obtain any form of finance. Whilst it may not always be straightforward it is still possible to get a loan with bad credit.
Most people owe money to some extent but owing money in itself doesn’t necessarily result in a bad credit history – quite the opposite is true in fact as managing your debts responsibly and paying back on time and in accordance with the original credit agreement gives lenders confidence in you and hence rates you highly for future credit. Don’t manage these debts properly and next time you are looking for any form of finance you may find yourself with the difficult task of trying to get a loan with bad credit from the adverse credit marketplace.
A bad credit rating is as a result of defaulting on your debt repayments, CCJs and bankruptcy orders but not only this – every missed or late credit card payment, direct debit on those utility bills, council tax or others will put a black mark on your credit file for all to see and will affect your ability to obtain credit. Apply for credit of any description and get turned down as a result and this leaves another boot print on your credit file and so compounds the issue.
Of course mistakes do occur and so it’s always recommended that you keep a check on your credit file from time to time to make sure that it’s accurate – it’s your information and you’re entitled to view it and challenge if you feel it’s wrong.
Retaining a perfect credit rating and history is quite difficult, especially in these difficult times. Add up all the personal debts in the UK and the number is in excess of £1,450 Billion the majority of which is secured on property (typically mortgages) but over £200 Billion is owed in everyday consumer credit.
This shows that most people are in debt to some extent but millions have more debts than they can afford to pay off. Forgetting what is owed on the average mortgage, household debt is £8,042 per household according to recent figures. The scary debt facts are that approximately 330 people will be declared insolvent or bankrupt each day – about one person every 5 minutes of every day. Nearly 1,400 County Court Judgements are issued every day with an average amount of just under £3,500. Almost 100 properties are repossessed every day.
And this is why it’s so difficult to maintain a perfect credit history, it only takes a change in circumstances such as unemployment, a cut in working hours, illness, redundancy and all of a sudden there are debts that can’t be paid and commitments that can’t be maintained. When we tell you that currently over 1,500 people are being made redundant daily and over 800,000 have been unemployed for over 12 months it’s easy to see how this can happen so frequently.
When you find yourself with a bad credit history then credit options do still exist but via the sub-prime market which means that borrowers are charged a higher rate of interest and variable depending on the extent of the credit history problems or may require the security of property (home, car etc) or a guarantor who is prepared to underwrite the repayments. Sub-prime options are currently limited due to the global fiscal situation with even countries being affected by this credit crunch and have seen their credit ratings be reduced but it is still possible to get a loan with bad credit so shop around for the best deal you can find.