Securing a loan when you have poor credit history

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We all dream of having perfect credit history, sadly this is not the case. Many of us, due to some financial-related incident, will damage our credit record at some point in our lives. This makes it difficult to obtain a loan or credit for a purchase you wish to make. Thankfully all is not lost, there are a number of services out there for individuals and couples with bad credit looking for a loan. Many have been designed for those with poor credit history in mind.

High street banks may not be the answer

Many high street banks and supermarket lenders, will refuse to lend smaller amounts to people with any blemish on their credit record. They tend to provide larger loans to people with super-clean credit records, and in many cases you need to have a bank account with them to consider your loan application. Head line interest rates on these loans look very attractive, but are only available to a very small number of people.

For the rest of us, we need to consider alternatives. Companies that offer smaller loans to people with bad credit histories tend to provide a service to those 'in need' with a much more flexible and accommodating approach . They will allow you to borrow as little as £500, but typically offer around £2000 to £3000 to customers and are flexible in the repayment term so that weekly or monthly repayments are affordable to you.

Sidestepping the credit check

When your bank won’t help and you have to look elsewhere for a loan, one draw back is that if you apply to several different lenders in a short space of time and these lenders undertake a ‘hard’ credit search on you, this will make your credit score worse. So one thing to be weary of is to check the fine-print or ask the lender that you are applying to about their credit scoring. Some lenders such as Everyday Loans will only do a ‘soft’ credit search on you. This means that that they do not leave a footprint for other lenders to see and their search does not affect your credit score in any way. Soft searches are also called quotation searches.

Apply directly to a lender

If you search for loan providers online, you will be presented with a plethora of options, many of which will be companies that do no more than take your application and pass it on to a lender. Some will also charge you a fee for this. Again, be careful about giving bank account details when you apply for a loan – if you are asked to do this, it usually means the broker is charging you a fee. A lender will not ask you for any up front payment to consider your application. So be careful to read the terms and conditions for any website that you give your information to. Check whether they will charge you a fee and check what they will do with your information.

Most lenders will give you an immediate decision in principle when you apply online to them.

Speak to your local lender

If you have had problems with your credit in the past and want some help sorting it out, it can help to speak to a local lender that specialises in helping people with poor credit history. Everyday Loans, located at Newminster House, 27-29 Baldwin Street in the heart of Bristol is one such company where you can pop into the branch and have a friendly chat with a specialist who will be happy to discuss your financial situation and see if they can help.