Some ways to improve your credit score include:

• Pay off your debts. This is the most important thing you can do to improve your credit score. Lenders want to see that you are able to manage your debt responsibly. If you have a lot of debt, it may be helpful to consolidate your debt into one loan with a lower interest rate.

• Make on-time payments. This is another important factor that lenders consider when evaluating your credit score. If you make all of your payments on time, it will show lenders that you are a responsible borrower.
• Dispute inaccurate information on your credit report. If you see any inaccurate information on your credit report, such as late payments that you did not make, you should dispute it. This can help to improve your credit score.
• Open a new credit card. If you do not have any credit history, or if your credit history is very limited, you may want to open a new credit card. This will help to establish a credit history and can help to improve your credit score.
• Use less than 30% of your available credit. Lenders look at your credit utilisation ratio, which is the amount of credit you are using divided by the total amount of credit you have available. A low credit utilisation ratio is considered to be a good thing.
• Avoid applying for too many loans or credit cards in a short period of time. This can lower your credit score.
• Wait. It takes time to improve your credit score. It may take several months or even years to see significant improvement.

It is important to note that not all of these things will improve your credit score in the same way. Paying off your debts and making on-time payments are the most important things you can do.

Can you afford the loan?

People with a bad credit history often find that their loans come with high-interest rates, as lenders want more security. You’ll have to pay more each month than someone with excellent credit, and also ensure you don’t miss any monthly repayments.

An unexpected expense, such as car or boiler repairs, could impact your loan repayments, creating issues further down the line.

If you know that you live on a tight budget each month, it might be best to improve your financial situation before taking out a loan.

Failing to stick to your payment schedule could cause problems

Lenders expect people to make monthly loan payments, but defaulting on those payments could put you at risk. Some loan providers will discuss any financial difficulties you’re having and might be able to make repayments, but this isn’t a guarantee.

If you owe money to a lender, they can make a new payment schedule or get a debt collection agency to recover any outstanding amounts through your assets.

In serious cases, you could also end up in court with a judgement on your file.

Lenders consider numerous factors

• Credit score is one of the most important factors that lenders consider when approving bad credit loans. A good credit score shows that you have a history of making on-time payments and managing your debt responsibly. However, even if you have a poor credit score, you may still be able to get approved for a bad credit loan if you have other factors in your favour, such as a stable employment history and a high income.
• Employment history is another important factor that lenders consider. Lenders want to see that you have a steady job and a consistent income. If you have been employed for a long time and have a good track record of job stability, this will be a positive factor in your application.
• Income is also important to lenders. They want to make sure that you can afford the monthly payments on the loan. If you have a high income, this will be a positive factor in your application.
• Debt-to-income ratio is the amount of debt you have compared to your income. A high debt-to-income ratio can make it difficult to get approved for a loan, even if you have a good credit score. Lenders want to make sure that you have enough disposable income to make the monthly payments on the loan.
• History of making on-time payments is another important factor that lenders consider. If you have a history of making on-time payments, this will show lenders that you are a responsible borrower. However, if you have a history of late payments or defaults, this will be a negative factor in your application.
• Collateral is something of value that you can offer to the lender as security if you default on the loan. If you have collateral, such as a car or a house, this can make it more likely that you will be approved for a loan. However, owning a house doesn’t guarantee a loan because lenders need to look at your current equity. For example, if your home is worth £300,000, but you have a mortgage of £250,000, your equity will only be £50,000, so you can borrow up to that amount.
• Other factors lenders may also consider other factors, such as your age, your marital status, and your financial goals. If you are a young borrower, you may have a harder time getting approved for a loan than an older borrower. If you are married, your spouse’s income and credit history may also be considered. And if you have specific financial goals, such as buying a house or starting a business, lenders may be more willing to work with you.

It is important to note that not all lenders will consider all of these factors. Some lenders may focus more on one factor than another. It is also important to remember that even if you have a good credit score, you may still be denied a loan if you have other negative factors in your application.

If you are denied a loan, it is important to ask the lender why you were denied. This will help you understand what you need to do to improve your chances of getting approved for a loan in the future.

The different interest rates and fees associated with bad credit loans

• Interest rates for bad credit loans can range from 10% to 40% APR (annual percentage rate). The interest rate you are offered will depend on a number of factors, including your credit score, the amount of money you borrow, and the length of the loan term.
• Fees associated with bad credit loans can also be high. These fees can include:
• Arrangement fees, which are charged when you take out the loan. These fees can range from £100 to £300.
• Early repayment fees, which are charged if you repay the loan early. These fees can be up to 5% of the outstanding balance.
• Monthly service fees, which are charged each month to cover the lender’s administrative costs. These fees can range from £5 to £10.

The different repayment terms available for bad credit loans

• Repayment terms for bad credit loans can range from 12 months to 60 months. The repayment term you are offered will depend on a number of factors, including your credit score, the amount of money you borrow, and the interest rate you are offered.
• Short-term bad credit loans typically have repayment terms of 12 to 24 months. These loans are often offered by payday lenders and other high-cost lenders. They typically have very high interest rates and fees, so they should only be used as a last resort.
• Medium-term bad credit loans typically have repayment terms of 24 to 36 months. These loans may be offered by banks and other mainstream lenders. They typically have lower interest rates and fees than short-term bad credit loans, but they may still be more expensive than loans for borrowers with good credit.
• Long-term bad credit loans typically have repayment terms of 36 to 60 months. These loans may be offered by banks and other mainstream lenders. They typically have the lowest interest rates and fees of all the bad credit loans, but they may still be more expensive than loans for borrowers with good credit.

It is important to choose a repayment term that you can afford. If you cannot afford the monthly repayments, you may end up defaulting on the loan, which could damage your credit score even further.

How much can I borrow?

There are no set amount lenders offer because it depends on the above circumstances. Also, the type of loan will determine how much money you receive.

Secured loans are ideal for large purchases, as these loans can exceed £100,000. However, you won’t be eligible for secured loans if you don’t own a home.

Instead, your options will be limited to unsecured loans, they usually offer lower amounts of money.

The cut-off point is under £25,000, so these loans typically pay for smaller purchases or debt consolidation.

We partner with specialist lenders

While you can go online and find lenders who’ll take you on, you won’t have much choice. As a broker, we partner with multiple lenders, including those who offer money to individuals considered higher risk.

If you’re having no luck with mainstream lenders, we can help you get a loan that suits your financial state.

Our checks won’t affect your credit score

We need to perform credit checks to match you with the best lenders. However, our soft credit check won’t impact your score, so you can rest assured that we’ll help you without worsening the situation.

Competitive interest rates

Wherever possible, we try to ensure our lenders offer competitive interest rates. Your credit score and factors such as missed payments will have an impact, but we go out of our way to find a suitable loan.

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