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If your credit score is a little worse for wear but you need to borrow money, it can be hard to find a lender that is willing to lend you money, let alone find a good deal. However, when it comes to very bad credit loans, there are ways to make sure that you find the loan that is right for you.
Step One: Understand your credit score
Right, let’s get the nitty gritty details out of the way first: the dreaded, fear-inducing credit score.
(It’s not that scary, honest.)
In the simplest terms, your credit score is a method that lenders use to determine the likelihood that you’ll be able to make the repayment terms of any amount you borrow. To calculate this, they consider everything from whether you’re registered on the electoral roll to whether you’ve missed any payments on existing or previous borrowings. This score is then used to determine how likely you are to be able to repay the agreed amounts.
Luckily, there are lots of free ways to find out your credit score. Experian, Clear Score and Noddle all offer free services that allow you to check your credit score (and things that have affected it recently). We recently put together a guide to finding out your credit score.
If you’ve got a poor credit score, it’s not the end of the world. You’ve probably missed a few payments or have already borrowed a lot of money. It sounds scarier than it is, and there are steps you can take to start improving your credit score straight away. (Check out our other post on your credit score for some starter tips.)
Consider your options
When it comes to very bad credit loans, it can often feel like you don’t have very many options. While some people choose to wait until they’ve repaired their credit scores to apply for a loan, others don’t have that luxury.
Sometimes it can feel like you’re going to get stuck with a deal that’s only going to make your situation worse. (A pay day loan, for example.)
However, there are options. In fact, there are quite a few. Here are our top three solutions for borrowing money, even when your credit score is less than perfect.
Very bad credit loans: the options
Peer-to-peer lending (or P2P lending) is a relatively new form of borrowing money. Much like borrowing from a friend, P2P lending lets you get a loan from strangers online. Essentially, you borrow from individuals that are willing to lend you the money you need and that – in many cases – offer much better repayment terms than you’d get from a bank. If you’re looking for very bad credit loans, it’s worth checking out.
That said, be careful. P2P lending is still a relatively new method of lending and borrowing money.
Borrowing from friends and family
If you’re really struggling to find very bad credit loans that suits your credit score, then it might be a good idea to speak to your friends and family.
First of all, they are often willing to do all they can to help. Quite often, family and friends are happy to wait until you’re back on your feet to ask for repayments, and even then are very understanding about what you can afford.
However, bear in mind that borrowing from friends and family may mean that they dip into their own emergency fund – so don’t be offended or upset if they say that they can’t afford it. There is another way that your family can help:
A guarantor loan
Having a guarantor (at Bamboo, a guarantor can be anybody over the age of 21, who has a regular income and can afford to make the loan repayments on your behalf) when you apply for a loan can make a huge difference when you’re looking for very bad credit loans.
Having a guarantor makes sure that, in the eyes of the lender, you are a much safer option. This makes you much more likely to be accepted for a loan, which is great because regular repayments on this loan can fix your credit score in the long run.
At Bamboo, we offer personalised very bad credit loans that are tailored specifically to you and your circumstances. We also show you exactly how much you could borrow and how much you’d have to repay. And, if you’re accepted, the money could be in your account the very same day. Representative 49.7% APR.
If you’re considering taking out a guarantor loan – why not get an instant quote to see how much you can borrow? It’s quick, easy and – most importantly – leaves no mark on your credit history.
- Author Jack Barclay
- Posted 30 January 2017