Bad Credit

Bad Credit and How To Deal With it !

“Since the recession, there has been a huge change in the way companies lend money. If you have a bad credit rating, gone are the days of a simple increase in interest. Nowadays, if you have a bad credit check, it can be a lot more detrimental to your life than originally thought…

To start off with, it is very difficult to rent a property if you have a bad credit rating due to the fact that your landlord will look at your credit rating as a way to assess the likelihood of you paying your rent on time or at all.
The problem does not only lie in the rental market. In order to attain a mortgage, it is essential that you have a good credit rating. Since the recession, lenders are very unlikely to provide a mortgage for anyone with bad credit.

Getting a Job
With your permission, it is legal for an employer to run a credit check as part of your initial job interview. This is mainly for jobs that work closely with financial services but is not unheard of in other industries too. This means having a bad credit rating can sometimes prohibit you from working at a company.

Insurance Policies
Car and home insurance is an expensive necessity that most people pay over the year in monthly installments. This is, however, dependent on a credit check. If you are not in the position to pay your policy in full, you may be refused the chance to spread the cost over the year due to bad credit.

New Business Loans
If starting a new business, most people will need to approach a bank or finance company for financial backing in order to make their ideas take shape. With a personal bad credit rating, it is very doubtful that a company will fiscally back your business idea.

Car Finance
Buying a new car is expensive, and most people do not have the luxury of paying in full for their automobile. If buying your car from a licensed vehicle trader, they will base the decision to provide you with finance on your credit rating.

Utility Companies
Many utility companies will check your credit rating when you sign up for their services. If they don’t refuse your custom altogether, they may ask for a higher deposit in order for you to connect to their facilities.

Mobile Phone Contracts
When taking out a mobile phone contract, the provider will base their decision on your credit rating. If you have a bad credit check, they may deny you a mobile phone contract.

After receiving the news that they have a bad credit rating, many potential borrowers will think that they’re well and truly on their own. Indeed, a bad credit check shows that they have possibly been unable to control the funds lent to them in the past, or at best, that their budgeting needs a rather large overhaul.

However, there are still options available to those with bad credit, albeit in the form of ‘consolidation loans’, payday loans or credit cards intended to help rebuild damaged credit ratings. In rarer circumstances, the borrower’s bank may still even consider the customer for an overdraft, although this lending at a basic level is weighted heavily on the results of a credit rating; get a bad credit check and this is most likely out of bounds.

For Bad Credit Reviews

Any form of lending available to those unlucky enough to receive a bad credit check is going to be heavily in the lender’s favour. After all, you’ve come to them because you have nowhere else to go. They know that they can effectively charge what they like (whether this is in the form of astronomically high APR of ‘processing fees’) and there is a borrower somewhere that is desperate enough to pay it. This principle can effectively be applied to any form of ‘bad credit lending’, but particularly in the case of loans, payday or otherwise. Any kind of credit card is likely to have a low credit limit, a high APR compared to it’s normal counterpart, and hideous fees for late or missed payments. Add that to the likely annual maintenance charge and it suddenly doesn’t become such an attractive option.

A relative newcomer in the way of solutions is peer to peer lending. This is a facility whereby the lender is matched with a borrower; however, websites offering this service will likely charge a fee, and it’s so new to the market that it is only loosely governed by financial legislation.

The good news is, however, that the doors are not all closed. But with this in mind, the costs to the borrower will be much higher in the long term.

In the current financial climate, we are reliant on having a good credit score to gain a number of credit dependant amenities such as mobile phone contracts, mortgages, some bank accounts and insurance policies, car finance and many others. Because of this, if you suffer from a bad credit rating, it can seem as though there is no way to improve it due to all credit being rejected. However, there are some ways you can start to improve your rating and begin to benefit again…

Check all your Bad credit information is correct:

To start off with, it is important to make sure any debt you have is registered to your correct name and address. It is also important to make sure that you don’t have anyone else’s debts registered against your name by mistake. Once all of this is correct, register to the electoral roll at your current address.

Pay outstanding payments:
As simple as it sounds, one of the best ways to get your credit back on track is to pay off any outstanding loans you may have. If it is unrealistic for you to clear any debt in full, then call the company and set up a payment plan that is reasonable for you as a way to clear your debt.

Only apply realistically:
If a company refuses an application, do not continue to reapply. This can be seen as desperation by financial services company and is therefore a risk they do not want to take on. Applying for services you are likely to be granted, and then making payments on time is a good way to boost your credit rating.

Consider store cards or prepaid credit cards:
Using a store card or prepaid credit card and making sure you make all payments on time is a good way to improve your credit rating over time.
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