Lower Credit Score Loans

20-01-09 14:19

Defining “less than perfect” credit

Your credit report demonstrates how you have dealt with past credit and how you handle your bills, allowing lenders to assess your level of risk when you apply for credit. So, “less than perfect credit” generally describes a record of past difficulties in keeping up with your credit agreements - any late repayments or no repayments will show on your credit report over time. Each lender will have their own appetite for risk so there may still be a lender out there for your situation.

Can I get a loan if I have a low credit score?

As you probably realise, your chances of being approved for a loan are much higher if you have a reasonable credit score, as lenders are likely to avoid taking larger risks. However, there are options designed for those who don’t have the most perfect credit history. These loans typically have higher interest rates and greater restrictions than other loans, simply because those applicants are considered to be a riskier proposition than those with higher credit scores.

What makes me eligible?

In the UK, to apply for a loan designed for those without the best credit, you must meet a number of criteria. First of all, you’ll need to be a UK resident who is over the age of 18. You must also not be bankrupt, have evidence of a steady income and have access to an active bank account. Remember that with any loan application you will undergo a credit and affordability check, so that the lender can determine whether repayment of the loan would put you into financial difficulties or you’re outside of their risk criteria or not.

Will I need to have a guarantor?

Not necessarily but it could increase your chances of acceptance. If you have less than perfect credit, having a guarantor could help build up your score. It would also give lenders more confidence that you will pay the money back.

What are my other options?

If you don’t have a great credit profile and are unable to use a guarantor, there are other options. You could use a free eligibility checker which will show you what loans you are likely to be offered, without harming your credit score. Also, before applying it would be a good idea to review your report so that you could look to make changes to put you in the best possible position for receiving credit. Using our tool Credit Knowledge* will give you access to your own, detailed credit report. Credit Knowledge will help guide you in making your report more attractive to lenders and indicate to you why you may have been refused credit in the past.

*Please see site for Terms & Conditions