Okay, let’s get one thing straight before we start: a bad credit score isn’t a reflection on you as a person. Good people can have bad credit scores, careful people can have bad credit scores and even people who’ve never had credit can have less than perfect credit scores. It really can happen for any number of reasons.
So what exactly is a bad credit score?
Your credit score is simply an indication of your credit history. The ‘bad’ bit comes in for a number of reasons – it could be because you were late making a loan repayment (or missed one altogether). Having a debt handed over to a debt collection agency, being declared bankrupt or having your home or car repossessed all can have implications for your credit record.
How does it affect me?
All of these events are recorded on your credit history, which is then used by loan providers and financial services companies to assess whether you’re a good risk for credit. With a bad credit history, you could be turned down for loans. This is because lenders may believe that you are more likely to default on repayments (not be able to pay back your loan).
Other consequences of a poor credit history could include being turned down for a mobile phone contract, mortgage or car insurance. Anything which requires a check of your financial history.
Even low credit users can end up with a bad credit score
You don’t need to have missed a loan repayment or gone bankrupt to end up with a bad credit score. Even people who have never borrowed anything can end up in the same boat – purely because loan companies and credit providers do not have enough information to check whether or not they are a sensible credit risk.
So can you get finance with a poor credit history?
There are companies who specialise in loans for people with bad credit scores and they offer an alternative to the high street banks. Loans at Home is one of these companies and we look at more than just your credit score. If you’re looking to borrow some money, you can apply today and find out if we could accept you in principle for a cash loan.
If you’re struggling and need expert help, don’t panic, there are a number of places you can go to: National Debt Line is a specialist debt charity, whilst your local Citizens Advice Bureau are also on hand to provide expert support on a wide range of financial issues.