I’ve Got Bad Credit, Why Can’t I Get a Loan?

Not being able to get a loan can be frustrating. Not only could it stop you from doing some of those nice things in life, such as going on that holiday you’ve always wanted to go on or buying a brand new car or even some of the more fundamental things in life that have to be done rather than wished for, like paying for an unexpected funeral.

If you have bad credit, finding a loan can be difficult but there are solutions available that can get you out of trouble if you need it.

We’ll take a look at why bad credit can affect your chances of getting a loan with bad credit and also what you can do if you find yourself in the situation of having a low credit score.

Why Might a Credit Score be Low?

Firstly, having a bad credit score isn’t always linked to poor financial decisions. Credit reference agencies keep a tally on how you manage your financial obligations in terms of any credit that you have taken out.

If you have never used credit it might well be that the agencies do not have enough information to be able to provide you with a high credit score. Low credit scores can also be because of the financial obligations that you already have.

Lenders tell agencies exactly how much they have lent to you every time you take out a new financial commitment. This means that when you make a new application a lender can see exactly how much credit you already have available to you, this may have a negative impact on your credit score.

If you miss payments lenders will also inform credit reference agency, who will, in turn, lower your credit score. Your score is all about how well you have managed your credit in the past.

I Have Been Turned Down for a Loan, What Can I Do?

The first step is not to panic. It can be tempting to reach out to other lenders to see if they can help you out but every time you make an application it is logged on your credit report, potentially, making your credit score even worse.

There are plenty of other options available to you and this should be where you divert your attention. It might be worth requesting to see your credit report so that you can check all of the information on there is correct. If it isn’t you can always approach the credit reference agency and ask them to remove information that is out of date, which might well help.

Alternatively, if the information supplied is correct, you could always look into personal bad credit loans. These are loans that come from lenders who specialise in dealing with customers with a poor credit history. They can help you get the money that you need when you need it most.

What is a Bad Credit Loan?

Loans designed for people with bad credit or debt consolidation loans are there to help people at their worst times. They can be a lifeline for those people who are struggling to repay a number of smaller, shorter loans.

Lenders within this sector usually specialise in helping people with a poor credit score and they can help because they look at the entire situation, not just one figure.

They will, for instance, take into account the applicants earnings and their ability to pay back the loan as well as any other relevant information.

They will never turn someone away simply because of a number on a report. Applications are usually fast and easy because lenders recognise that you might need the money quickly and the funds can often be sent to your account on the same day.

Will a Loan Help me in the Long Term?

Yes, if you have a poor credit score and are considering taking out a debt consolidation or other type of loan it could help you to get your financial records back on the right track.

Remember, this loan will show up on your credit file too but if you keep up with your repayments you can start to demonstrate that you are financially trustworthy.

It might take some time but bit by bit you can rebuild that credit score and improve your chances of obtaining finance in the future.