How to Work Around a Poor Credit Rating
Most of us need some help from time to time, whether it’s friends who are there for us through the bad times, a family who’ll support us when things go wrong, or a loan company that will lend us money when we’re a little short.
Almost all of us will approach such an entity at some point in our lives. Although they’re not a fix for when you find yourself strapped for cash, they can provide a useful boost when you don’t have the immediate funds to cover the cost of a potential purchase, whether this is a new car, an extension, or a piece of kit to support your hobby.
The problem arises when you find yourself with a bad credit rating. Suddenly, you present a much higher risk to lenders, and this means that most loan companies will be unwilling to extend funds. Thankfully, there are ways to work around this. Here are three that you might want to consider…
#1: Improve Your Credit Score
Although bad credit may be due to past financial mistakes, in some cases, it is actually because you’ve never built a credit history to begin with. If you’ve never borrowed money before, lenders lack the tools to assess your reliability, so the best thing that you can do is apply for a secured credit card. Although this may seem counter-intuitive, if you choose a short-term deal, and make sure that all of your repayments are made on time,it will soon improve your rating.
#2: Bad Credit Loans
If improving your credit score is not an option for you, either due to time constraints or serious past mistakes, then take the time to look into bad credit loans. Offered by a number of specialist companies, these assess your ability to meet repayments based on more than just your financial history. They’ll take into account a wide variety of factors, from your age to your income and employment status, which could make them the ideal solution for you.
#3: Guarantor Loans
A second borrowing option to consider is guarantor loans. These work by using a second party’s credit rating as a safeguard, relying on this individual to cover the debt in your stead if you should default. Although a lot of people are loath to place such a burden on the shoulders of someone else, they can be a really good choice if you’re sure that you have the money to repay them, so that the second person safeguard need never be triggered.
If you’re struggling to borrow, could one of these options offer the solution to your problems?