Getting a loan when you have a bad credit rating

High street banks cherry pick borrowers with the highest credit scores meaning access to personal loans is a major issue for millions of creditworthy people up and down the country. A significant proportion of the population are often ignored by mainstream lenders because of their less than perfect credit histories. Bad credit can seriously hamper you in your hunt for a personal loan, but it doesn't need to prevent you from taking one out altogether, providing you approach a provider that offers loans for people with bad credit. You may be thinking that there isn't a loan provider in the land who would touch you with the proverbial bargepole, but you may be wrong. If your credit rating has been dented somewhat, perhaps you've got a CCJ or have missed a payment or two on a credit card, loan, energy bill or mortgage, you will need to consider a specialist lender that offers bad credit loans.

Gone are the days when banks were falling over themselves to offer loans to anybody who wanted one

As the economy plunged into dire straights back in 2008, lenders took a much tougher stance and were no longer casting their nets wide. Today they are primarily interested in a relatively narrow band of borrowers with excellent credit history. In the not too distant past, you would have trouble getting out of your front door each morning on account of having to wade through a mass of junk mail from lenders wanting to offer you a loan, or you'd switch on the television to see adverts from companies inviting you to apply for a loan even if you had a low credit score. Then came the credit crunch and the global financial crisis - all of a sudden the mood of lenders changed and they became only interested in customers with impeccable credit scores.

Bad credit specialists

As we all adjust to the realities of the new financial climate, one of the things we have to live with is the tougher line high street lenders are taking. During the previous decade, a raft of specialist poor credit loan companies sprung up to cater for the needs of individuals with low credit scores. Brands such as Welcome Finance offered to extend money to people who might have otherwise been turned down. Even though a number of these companies have long since departed, there are still some around. Although the eligibility criteria for these specialist providers is more relaxed, they will still credit score you against their criteria and will want to be confident you can afford to repay what you borrow. Depending on whether you are a homeowner or tenant will determine the choice of products open to you. Even if you are a tenant, there are still lenders wanting to do business with you, providing you can afford to keep up the repayments.

Don't take on more than you can afford

It's important to be sensible. Whatever the reason for borrowing, if you need a personal loan to cover some home improvements or repairs, to finance a new kitchen, to purchase a new car, to fund a wedding or holiday, don't get yourself in a position where you are stretching yourself by taking on more borrowing than you can reasonably afford to pay back. When you do take out a loan from a specialist lender, the rates will be higher than those available to people with good credit scores. The objective should be to borrow the money for the purpose intended and keep to the repayment schedule so that in due course your adverse credit history will become more distant, improving your chances of getting a better deal next time. The danger of taking on too much borrowing would mean you have a higher risk or defaulting on your payments which will compound your situation.