The truth is nobody likes to be judged. However, there are certain areas of life where we cannot help but face it. Whenever an individual considers the option of taking out a personal loan to manage the financial mess, they come across situations where a lender or broker skims through the credit report. This action or step becomes important as a credit report or credit score is regarded as a reflection of an individual’s personal finance management. Moreover, this leads the way for the lenders or brokers to approve a personal loan to an interested borrower.
A bad credit score effectively ruins your chances of borrowing a personal loan as lenders and brokers consider you as a bad investment choice due to your past default repayment history which has shaken up your entire credit report. A credit score is based on an individual’s entire debt and credit history, especially the financial behaviour of the individual is observed in a credit report. Still, an individual having a bad credit score can also apply for a personal loan, which can be approved. Yes, there are personal loans designed for people who have a bad credit score.
First, let us understand what is a bad credit score and then gradually we will move to personal loans with bad credit.
A Bad Credit Score
A person can have a bad credit score if they have not paid their bills on time or they have failed to make repayments. Whenever you fail to make repayments, a mark is made on your credit report, which affects your eligibility for applying for a loan. You may apply for a loan, but the lenders may not accept the same.
A credit record of past payment failure(s) on your credit agreements results in the inability to be approved for a new credit request. In short, a bad credit score will never result in anything good or will never be beneficial for you.
How to Fix a Bad Credit Score
If you always stay on top of your finances, you may have a decent idea of where your credit score stands. There are three different credit reference agencies operating in the financial market of the United Kingdom to maintain a healthy financial market. The UK is widely known as one of the most regulated financial markets in the world. Experian, Equifax, and Callcredit are independent bodies who collect information about the borrowers from lenders, brokers, credit unions and share the information with financial institutions when you forward your credit application. The data available with the credit reference agencies is updated every 4-6 weeks. It may be possible that the data that these three agencies have to vary from each other a bit. Credit Reference Agencies play a dominant role in fighting crime; to combat money laundering, prevent frauds, and helps in the recovery of debts. Precisely, the main role of CRAs is to maintain and administer the loan process to make it smooth and regulated.
A good credit score will always help you to fetch the best rates and terms for a loan. Nevertheless, always remember that a credit score is not static; they keep on fluctuating as per your repayment behaviour. This also indicates that if an individual has a bad credit score, he can always improve their credit score.
Even if you have no credit history, you have ways to improve credit scores too. Listed below are some of the ways to rebuild or improve your credit score:
- Try to pay all your bills on schedule time
- Always try to keep your debts low to struggling
- Avail loan only when you need it badly and you do not have any other source of financial help that generally comes from friends and relatives
- Avoid dragging the loan tenure unnecessarily
- Do not apply for loans unnecessarily as a lot of credit checks on your credit report may also ruin the credit score
Apart from all these above-mentioned ways, an individual who does not have any credit history at all can start building a credit history by opting for a new loan and repaying on time.
You have to understand that improving credit score is a long and time taking process. These do not improve your credit score overnight. Therefore, beware of any organisation, which claims to repair your credit score free in little or no time. This may be set up or trap which might drag you deeper into a credit mess.
Analyse the factors that are ruining your credit score and start working on them to build and maintain a good credit score.
Bad Credit Personal Loan Plan
It does not necessarily mean that if you have a bad credit score, your loan application will not be approved. As per the guidelines by FCA, a soft-credit check is run to assess your credit report. Please note that a soft-credit check will not harm your credit report. Hence, it is considered one of the safest practices in the entire loan borrowing process.
Post a soft-credit check, your application form will be sent to a pool of regulated lenders for further processing. There may be some lenders who will accept your application despite bad credit history. This will also become a way to boost your credit score. Some lenders in the market are ready to give loans to people with bad credit history and some lenders do not accept the loan request. At Oyster Loan, we deal with multiple lenders, so finding both kinds of lenders is quite easy a task.
Choose from a wide range of unsecured loan services to fulfil your credit requirements. Oyster Loan offers a bad credit personal loan. All you have to do is fill an online application form with necessary details and submit the same. If you have any queries regarding your loan, you may always contact the team on the contact number that is available on the website.
Shop Around for Personal Loans
Have you ever noticed that to pick a dress or a pair of jeans, we hop around 5-6 stores before paying for the one we want? Even when we are shopping online, we check 5-6 websites and then finally decide on one! Then why not to do the same while borrowing a personal loan? Always remember to shop around and explore to know the best interest rates and terms. By doing this, you will definitely come across something that fits your needs. We will advise you to compare offers with other credit options or alternatives.
Terms and Conditions of Bad Credit Personal Loan
Please go through the Terms and Conditions of a personal loan or any loan that you are opting for. Discuss points you do not understand with the organisation and be clear so that you know what you are agreeing to. Consumer-friendly loan brokers as Oyster Loan has a team which will provide 24/7 assistance to its customers.
Always consider other credit alternatives before opting for a personal unsecured loan or any type of loan.