Practical tips to help you improve your credit rating and avoid expensive high interest loans
Unfortunately this has led to some lenders taking advantage of people who are desperately in need of money to pay the bills or an emergency expense.
Here we identify some of the more common iffy practices, we have highlighted 3 of the most common warning signs to be aware of when looking for a poor credit loan.
If regular personal loans from your bank or building society are out of your reach at the moment, it is crucial that you do not leave your common sense behind when looking for a loan.
Scams such as the letter through your door saying you’ve won a competition, then having to ring a premium rate number to claim the prize are easy to spot.
But some of the tactics used by the less ethical loan companies out there are a little sneakier.
One classic example of a dodgy loan was highlighted in the Guardian recently:
So if a poor credit loan is being offered to you at a very low interest rate, beware, there is every chance that something is not right.
This is a question that will often stand you in good stead throughout all walks of life, if something sounds too good to be true, it usually is.
There are a great number of legitimate lenders who will happily offer loans to people with a poor credit rating but there are always contingencies put in place to reduce the risk to the lender (i.e. guaranteed loans).
Have you been offered a loan by a lender who is prepared to skip the credit checking process? Credit checks are a crucial part of the application process for all quality lenders and if your lender is prepared to skip this, there is every chance that the loan you receive will come with an astronomical APR.
Deals that seem too good to be true are usually just that.
This one can be a little tricky and should always be approached with a slightly more open mind for the following reasons.
If you are using a credit broker to arrange your loan, you will be a charged a fee by the broker for the use of their services. If however, you have approached your lender directly, any up-front fees should be viewed with extreme caution.
These are all extremely unlikely to be true and will almost certainly lead to a loss of money.[vc_message color=”alert-warning”]
The Citizens Advice Bureau have offered their top tips on fake loans:
For more information on how to avoid ‘dodgy’ or fake loans, take a look at the following Citizens Advice Bureau article – Cold call credit cashing in on recession misery