Can I use Short Term Loans with a Poor Credit Record?
If we have a poor credit record it means that we will often be turned down for loans. This can be a big problem for us, if we need to borrow money. It is therefore worth finding out more about what a credit record is, how we can improve it and whether we still borrow with a poor one.
What is a credit record?
A credit record is a document which shows details of someone’s personal finances. It will have information such as what loans they have now and have had in the past and if they are keeping up with repayments. What regular payments are being made for things like utilities rent, contracts etc. What loans have recently been applied for, including ones that have been declined. It also has your address details, whether you own or rent, your income details and your household income.
Ideally you want the best possible credit record that you can have as if it is a good a lender is more likely to give you a loan. However, it can be quite complicated. This is because some lenders will have different criteria when they are judging whether to lend to you, compared with others. This makes things tricky as you do not know where or what to improve or whether you are likely to get a loan. Some lenders like you to have missed a few payments because lenders can profit from people doing this as they charge extra for it. However, most will want to see that you make payments on time. This can make it difficult to know exactly what will look good.
If you check your own credit record then this can help you to see where you might be able to change it. You can do this for free and it does not leave a trace on the credit report that it has been looked at.
How can it be improved?
If you take a look at your credit report it is worth starting with looking to see if the details are correct. It will have name, address, dependents, earnings and things like this which you can update if they have changed. It is really important to keep these things up to date as they could make a significant difference to your credit score. For example, if your children have started work, they will no longer be dependent, if your earnings have gone up that will have an impact and if you have moved house you will need those details to be changed. You will also need to check all of the information to make sure that it is correct as if you didn’t pay for an item because it didn’t turn up but that gets flagged up then you will look untrustworthy so make sure this is clarified and removed.
There are other things that you can do that will help you to be able to improve your credit score so you may want to try some or all of them. You want to start by making sure that you have registered to vote. The electoral role is used by lenders to check your address and if you are not on it, you are unlikely to get any loans at all.
If your accounts are linked to someone else (such as your spouse) and they have a poor credit score, then you could be assessed to be the same as them. So be careful if your name is jointly on mortgages, loans, bank accounts and utility bills as if they have a poor credit history you could be brought down because of it. Another tip is to not withdraw cash on credit cards. This is because you will look as though you are desperate for money – so always make sure that you use your debit card to draw out cash.
Can I borrow with a poor credit record?
If you have a poor credit record and need to borrow money soon, you will need to find a lender and there will not be time to improve your credit record. This means that you will need a lender that will not worry about what you credit record has on it. Luckily, there are now lenders which fall into this category and do not worry about your credit record. They will need to use it to check your address but they will not worry if you have missed loan payments or any of the other problems that might cause other lenders to decline you credit. These loans are short-term loans, or they be known as payday loans, no credit loans or by other names. They will be available to most people and you will normally be able to borrow up to £1,000 without having to have a good credit record.