Practical tips to help you improve your credit rating and avoid expensive high interest loans
Many people enter the loan market looking to improve their cash flow, only to find that they ultimately have exactly the opposite effect.
Especially if you are unfortunate enough to have a poor credit rating, so can make borrowing very expensive.
Sadly, there are a whole host of common mistakes people make when looking for a loan but to help ensure that you don’t make a bad situation worse, avoiding the following three mistakes will get you on the right track.
Opting for the first loan that you come across is highly unlikely to provide the cheapest option.
Many people with a poor credit rating are so relieved at being offered a loan that they are happy to accept the first offer that comes their way. This is rarely a good idea.
One of the best ways to assess whether a deal is or not is to find others to compare it to.
So the suggested first step, is to do some research to find a number of potential loans that could be suitable for your credit history.
Top Tip – Shopping around has never been easier
Comparison websites such as our own ensure that shopping around has never been easier.
Have you taken the time to read about your loan? Do you understand what will happen if you miss a payment? Can you repay it earlier than scheduled without incurring a charge?
Signing up for any type of loan or credit is a serious commitment and should be treated as such. Loan agreements are legally binding and you should not complete anything until you understand everything there is to know about your loan.
Please remember – Failure to understand the potential consequences of non-compliance with loan requirements can result in very serious repercussions. Did you know that taking out a payday loan can impact your ability to obtain a mortgage in the future?
It is all too easy to add a little extra onto your loan but this will inevitably lead to repayments being higher than they need to be.
If after working everything out you find that you need £1,000 to repair your car, only to find that you actually have access to a £1,200 loan, don’t apply for the larger amount. Stick to the amount that you originally worked out.
Unnecessary debt is often classed as ‘bad debt’.
We suggest keeping a regular check on your credit rating because this will play a critical role in the loans that you are eligible for.
The team over at Which? have compiled a comprehensive guide that highlights everything that you need to know about checking your credit rating and why you no longer need to pay to do so.
If you have a poor credit rating we can.
If you have a good credit rating, you could be better placed to first try your bank and other high street lenders who may have more cost-effective options for you?
At GLUK we have been helping with a poor credit history find affordable loans, large and small since 2015. Loans range in size from £100 to £15,000 and can suit a wide range of circumstances.