Are Unsecured Loans Good or Bad for your Credit History?

Are Unsecured Loans Good or Bad for your Credit History?

Posted by

“I am not a number! I’m a free man!”, said Number 6 in “The Prisoner”. This cult series was aired on ITV way back on September 29th, 1967 and, even more than fifty years later, the show is loved and fans still question every aspect of its storyline and its imagery. With so many people these days worried about their credit report before they apply for a loan, the question many potential borrowers ask themselves is whether lenders view them as a person or as a credit score?

If you’re considering applying for a poor credit loan online, what do you need to know about unsecured loans for poor credit in the UK? In this article, Oyster Loan will look at the following important factors:

  • What is a poor credit loan?
  • Does a poor credit loan stop you from getting an unsecured loan?
  • Who produces credit reports here in the UK?
  • Can paying off an unsecured loan for poor credit improve your credit score?
  • The market for unsecured loans for poor credit in the UK.
  • Securing an advantage for yourself by applying for a poor credit loan through Oyster Loan.

Poor Credit Loans Online – Frequently Asked Questions

What is a Poor Credit Loan Online?

Strictly speaking, there’s no such thing as a poor credit loan online. Lenders either make loans available to people with less than perfect credit ratings or they don’t. If they do work with borrowers with poor credit and accept applications via the internet, it’s not a poor credit loan online to the lender – it’s the normal type of loan they make.

Every lender in the UK has a particular type of person they’re happy to provide a loan to. The problem for most borrowers, whether they have a spotless credit score or a poor credit score, is that lenders rarely tell the outside world the type of person they like to lend money to.

What if you knew before you made an application, the type of borrower a lender was happy to work with? That would make things a lot simpler but, unfortunately, it’s not the way the market works.

There are two types of companies in the lending market. There are the lenders themselves and you can approach them directly. On the other hand, there are brokers like Oyster Loan. Lenders spend so much money in marketing and advertising trying to attract people enough to make an application that they don’t want to put someone off applying for a loan who they’ve spent a lot of money getting to their website by displaying their preferred “borrower profile.”.

Brokers are different. Lenders tell brokers in advance the type of borrower they like to work with so that, when a broker receives a loan application, they know who to put the loan to for consideration and who not to put the loan to. It works both ways – brokers want to keep lenders onside by only presenting borrowers to them that they want to hear from.

Every time you apply directly to a lender, they have to perform a full credit search on you – it’s the law and it’s one of the things they must do to win and keep a licence to lend from the Financial Conduct Authority. Each one of those applications can be seen by other lenders that borrower approaches. With a broker, it’s different. A broker makes one credit search and they send that credit search to each lender regardless of whether they find just one company happy to work with you or whether they find ten.

That’s important because, even if you’re the type of borrower a lender wants to work with, they will often decline an application because someone has made too many applications in a short space of time. If you apply to ten lenders directly, there’ll be ten visible credit searches. If you apply to a broker like Oyster Loan, there’ll only be one visible search, no matter how many lenders they present your application to.

Will a Poor Credit Rating Stop Me From Getting An Unsecured Loan?

You might be surprised to hear but the answer is “no”. Whilst your bank may not consider your application because you have a poor credit score, specialist lenders who work with people who have had money problems in the past will be happy to receive your request. That doesn’t mean that they’ll say “yes” but, by working with Oyster Loan, we’ll make sure your application is only seen by the lenders who have told us directly and clearly that you’re their preferred type of borrower.

Who is Responsible for Credit Reports in the UK?

There are three main companies in the UK responsible for producing credit reports. Each credit report contains a lot of information about you, where you’ve lived, the credit lines you currently have available (including mortgages, loans, credit cards, and overdrafts), and how good you are at paying bills on time.

The three companies producing these reports are Equifax, Experian, and Call Credit. Each of these three companies produces their own credit reports and they have different ways of “scoring” people. For example, Call Credit rates people out of 1,000, Equifax from 280 to 850, and Experian from 330 to 830.

Contrary to popular belief, there is no credit blacklist. While Lender A or B might not consider your application because of your credit score, Lender X or Y might because their business has been specifically set up to offer poor credit loans online.

Can Paying off an Unsecured Loan for Poor Credit Improve My Credit Score?

Yes. Your credit score is updated every month by each of the three credit companies and your credit score will rise if, over time, you can show that you make your repayments on time and in full. The process is gradual and your score won’t improve overnight – think of it as a long-term exercise.

Unsecured Loans for Poor Credit UK

There are dozens of different lenders who provide unsecured loans for poor credit applicants. Every company is different and it always pays to shop around. Rather than making lots of different applications to poor credit lenders online where you don’t know if you’re their type of borrower, why not let Oyster Loan do it for you? We’ll not only save you a lot of time – we’ll also only perform one credit search no matter how many lenders we approach about lending you money.

Poor Credit Loans Online

Oyster Loan has dedicated poor credit loans, online team. Although we don’t lend you money ourselves, what we do is use a thorough and careful approach in selecting the lenders whose details we send your application to. We want to get you your loan in the quickest possible time and at the best possible rate.

Our advanced computer system finds you the best deals in seconds. Just wait a short time and see the very best deal we find for you with all the details you need to make an informed decision about whether the loan we find for you is right or not.

If we find a loan you like, make sure you’re happy with the plain English terms and conditions we’ll present you with and then sign the online paperwork. Depending on the lender and your bank, your loan could be with you in minutes once you’ve agreed to the loan we’ve found you.

The best thing of all? Oyster Loan is completely free to use and we never charge you a penny, regardless of whether you agree to take out the loan we’ve found you or not.

To start your application, please click here.

Leave a Reply

Your email address will not be published. Required fields are marked *