Practical tips to help you improve your credit rating and avoid expensive high interest loans
Finding an affordable loan if you have a poor credit rating that is available now can feel an impossible task.
Don’t give up hope though because it is not as tricky as you would imagine and by following the secrets outlined in the article below.
Lenders want their customers to believe that they will not get a better deal anywhere else.
Through a combination of skilled advertising and a lack of knowledge from many customers, it is surprising just how often people believe this without taking the time to look around.
Even if you have a terrible credit rating and everything seems to be against you, there are more options available to borrowers than ever before.
With loans ranging from guarantor loans to the infamous payday loans, there truly is something for everyone.
Compare loan sites (like this one 😀) remove hard work of reading lots of lenders website. In the past you had to visit each lender individually, it is now possible to submit a single application to a number of lenders.
If you have a poor credit rating and are looking for a loan, quotes from us are no obligation and help you quickly and easily find the best deal available to you.
Applying for a loan without checking your credit rating is a huge mistake which may result in a poor credit rating taking another hit.
Many lenders check the credit rating of a borrower during the application process to decide how much of a repayment risk they believe that they pose. This means that essentially, the worse your credit rating is, the smaller the chance of having your application granted.
Without knowing the state of your credit score, you could place your focus on a particular type of loan when cheaper options may be available.
You’ll notice that loans are quoted with a ‘representative APR’; its a little-known fact that not all applicants will be eligible for this rate!
The BSI (British Standards Institute) says
The Representative APR must reflect at least 51% of businesses expected to result from the advertisement. The standard information must be representative of agreements to which the Representative APR applies.
In other words, the Representative APR is the rate that at least 51% of lenders customer pay including all interest and fees. So you might be in the 49% and pay a rate that is higher or lower depending on your own personal circumstances.
The ‘Representative APR’ does make comparing lenders and their loans easier, but it does mean that the quote you receive is far more expensive (or cheaper) than the Representative APR
With many loans, you may have the opportunity to make additional (or larger) payments to pay off the loan quicker and reduce the overall cost.
The Money Advice Service article – How to reduce the cost of your personal loans states that:
With unsecured loans taken out after 1 February 2011, you can make extra payments of up to £8,000 in a 12-month period without penalty in almost all situations. For extra payments of over £8,000 the maximum penalty is 1% of the extra amount paid above the limit. For example, if you paid back £9,000 – £1,000 over the limit – the most you could be charged would be £10.
Just because you have taken out a loan with a company before, it does not mean that you have to use them again.
Some companies even offer better deals for new customers so it’s really important to ensure that you identify all of your options before signing up for. You shouldn’t stay with the same mobile phone company or energy provider out of blind loyalty if better options are available, why shouldn’t you apply this to your chosen lender as well?
Staying on top of your credit rating is absolutely crucial if you wish to become eligible for the cheapest loans on the market.
Despite there being a number of Credit Reference Agencies in the UK from which you can obtain your credit report, they are all likely to come back to you with slightly different information.