People with bad credit
If you have had problems with credit in the past, or are currently experiencing financial difficulties, you may think that you won’t qualify for a personal or secured loan.
However, there are loans available and here we highlight your choices and the issues you need to consider.
Is a secured loan the best choice for people with bad credit?
If you are a homeowner and have a history of bad credit you are more likely to be offered a secured loan rather than a personal loan.
A secured loan does offer more choice as:
- the eligibility criteria are generally less rigorous than a personal loan
- the amount you can borrow is higher than a personal loan
- the repayment term can be longer
However, the lending company is only able to offer these benefits because its risk is reduced by having your house as security against the loan. You need to think very carefully before taking out a
secured loan. If you default on your payments you could risk losing your home.
What other steps can I take to improve my credit rating
- Debt consolidation loan. If you want to control your debt by having one manageable, monthly repayment, a debt consolidation loan could help you.
- Pay off your loans. If you are able to pay off the loan and accrue no further debt, this will be seen as a positive value towards your credit rating.
- Check your credit report. It is a good idea to check your credit report before you apply for a debt consolidation loan or secured loan. You can see your credit report online with a free trial of Credit Expert* or for more information, read our background guide to credit reports.
This is best way forward for someone with a low credit rating, as if you apply for a loan to multiple lenders over a short time period and are turned down, you can damage your credit score.
Find a loan that could be suitable if you have bad credit - compare loans with uSwitch now.