Bad credit loans
Turned down for a loan? If you have a bad credit history you may still find yourself needing a loan for the unexpected. Bad credit loans refer to the loans given to those people applying for a loan with a bad credit history. Here at QuidMarket, we will consider loan applications from those with a less than perfect credit rating. If your bank, building society or another loan company has turned you down, this does not automatically mean that QuidMarket will decline your application.
· Bad credit applications are considered by QuidMarket
· No guarantor required
· QuidMarket is FCA Authorised
What is bad credit?
Every person’s credit history is stored and logged with Credit Reference Agencies (CRA) – Credit Providers use CRAs to help them make a lending decision.
A low credit score means the individual is considered to have a bad credit rating. This score is based on a number of factors including the repayment history (on time, amount of payment etc.) the amount borrowed and amount owed.
A person who does not make timely payments or who has defaulted on previous loans may be considered to have Bad Credit. Having Bad Credit may affect a customer’s ability to obtain credit from established lending sources or from being accepted for a mortgage or other secured loans.
Signs of a bad credit history
There are usually tell-tale signs to suggest that you have a bad credit rating;
· You can’t get a credit card
· You’ve been turned down for a loan previously
· Found it difficult to change energy suppliers
· Refused an account set-up by a catalogue
· You’ve been refused an account set-up by an online retailer
· Refused a mobile phone contract
Check credit file / Check credit history
So if you have seen some of the tell-tale signs above, how can you check your own credit file?
There are 3 credit reference agencies used in the financial service industry to check a person’s credit score. You have a statutory right to check the files held by these 3 companies:
· Experian – The largest agency. Most commonly used by lenders
· Equifax – 2nd largest agency.
· Callcredit – Newest agency. Not as widely used as the agencies above.
Check through your files regularly with a fine toothcomb to see if anything is hindering your score. If you find anything untoward on your file then contact the company in question and try resolve any outstanding issues.
How to improve credit rating / improve credit score
1. Register to vote
2. Never miss a re-payment
If you miss a payment to any account then it is within their scope to score you accordingly
4. Delink yourself financially from your Ex or share their score
5. Close any open accounts you are no longer using or they remain open indefinitely
6. Check your open accounts are pointing to your current address.
This one may seem strange but if you’ve got an old account still open when you were at a different address, this can impact your score as it confuses the credit agencies.
7. Pay rent on time to boost credit score
Are you paying rent? Help build your Experian credit score free by paying your rent on time. The Rental Exchange scheme was launched in 2016 to improve the credit rating of those paying on time each month. For more information, click the link below:
Bad Credit PayDay Loans
What is a bad credit payday loan?
Sometimes, a pay day loan is referred to as a “Bad Credit Pay Day Loan” – this means it is designed for people whose credit rating is not at strong to be accepted for a traditional unsecured loan.
This means the risk is higher so in turn, the loan company may increase their interest charges to mitigate against this.
Due to the high cost involved to the customer a pay day loan is designed to help meet unexpected costs over a short period of time and is unsustainable for long term financial issues.
Advantages and disadvantages of a bad credit payday loan
The main disadvantage is that interest charges may be increased to mitigate against the greater risk of the customer defaulting on the loan repayments compared to a customer with a high / good credit rating. This means a person may pay more when being offered a Bad Credit Pay Day loan.
However, the advantage is, without the option of a Bad Credit Pay Day loan, the customer may otherwise not be able to obtain the credit needed to help them through the short term financial difficulty they are needing help with.
Also, Bad Credit Pay Day loans can sometimes be known as “Credit Builders” – when a person has Bad Credit it can be difficult to improve this score without the opportunity of obtaining credit to repay. The more repayments made on time the higher a person’s Credit Rating will be and the more Credit Options will become available.
How affordable is a bad credit loan?
If a Bad Credit Pay Day loan is underwritten correctly, it should be just as affordable as any other credit option. Each Bad Credit Pay Day Loan should either be “funded” or “declined” based on a number of industry / regulatory guidelines alongside each companies own in-house policies – the main thing about a Bad Credit Pay Day Loan is that it undergoes an “affordability” assessment meaning it does not look at the total amount of credit, but rather the individual repayments compared to the customers incomings.
So, after breaking the Bad Credit Pay Day loan down into the individual repayments, this is then compared to the customers incomings and deemed affordable or not accordingly.
How can I check my credit score for free?
There are a number of ways of checking your Credit Score for free. There are a number of companies offering this service, including (but not limited to);
• Experian – www.experian.co.uk/Check/CreditScore
• Check My File – www.checkmyfile.com/free
• Credit Report – www.creditreport.co.uk
• Totally Money – www.totallymoney.com/Credit-Score/Free-Forever
• Clear Score – www.clearscore.com
Quid Market is not affiliated or promoted to any of these companies / Credit reference agencies.
Here is a guide to obtaining your Credit Report and what information is held on there;
Will my application for a bad credit loan affect by credit score?
As Bad Credit loans are based on affordability rather than creditworthiness, your credit score should not have too much of an effect on the decision.
However, each loan provider will have their own set of policies and guidelines – each application is judged on its own merit and criteria so until the application is made it is impossible to say definitively what affect a Bad Credit Score will have on the application.
Should I use a broker for a bad credit loan?
Usually, a broker acts as a “middleman” matching potential customers to Credit providers.
This in turn can mean the broker will have their own charges for providing this service which is then passed onto the customer – the effect of this can mean a higher cost form of Credit.
The decision is down to you, the customer, but there are the above factors to consider.
Quid Market is a direct lender and so there are no broker fees / charges helping us keep the costs down to you, the customer.
Summary bad credit loans
Many things affect your credit rating. The better your credit score the easier it is for you to use financial services and the more willing they are to lend you money. Also, the higher your score the better rates of interest you can achieve. Try to address any outstanding issues that are currently negatively affecting your credit score. Then, try to manage your ongoing finances so that you never miss a payment. If you do find yourself struggling to meet any payments, contact the lender as soon as possible and definitely before the payment is due. Check to see if you can make alternative (lower) payments without it negatively affecting your credit score. Most lenders will provide forbearance when you face short-term financial difficulties.