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If I have Bad Credit can I still Borrow Money?

Nov 4th 2015 at 12:52 PM

You might have a history of bad credit, and you might think that it’s not possible to get anymore credit. It’s possible you’ve already been rejected by a few lenders. Nevertheless, having a poor credit rating does not necessarily mean you cannot get credit. It takes a little more time and you’ll have to prepare yourself for higher interest rates, but it’s likely you can still be successful.

Should I be borrowing more money if I have bad credit?

That depends on:

- The cause of your bad credit and how your credit rating currently stands.

- Current income. Is it regular?

What Caused your Financial Problem?

If the cause was a small and single event, you might feel aggrieved as perhaps it was not of your doing.

Otherwise, if linked to many financial issues, it could pose a sign that, for now, taking on a bad credit loan is not wise.

How’s your Credit Rating?

1) Are you bankrupt? On a debt management program? On an IVA? It takes time to work through these issues, and in future, lenders are going to be cautious about offering you loans of any sort.

But, once you are back up and running, and you have a regular income, there will be some options from which to choose.

2) Defaults or CCJs?

Future lenders will not wish to see defaults or a CCJ (decree in Scotland) on your credit file. They are going to take a dim view that you did not pay off your debt when it was due. If you couldn’t manage this scenario before, can you do so in future?

3) You’ve made a few late payments on your current debt.

Any late payments are going to be recorded on your credit file, unless this was not of your doing and you can prove it.

4) Payday Loans

Having a record of using a payday loan on your credit file is, in some cases, enough of an indication to a potential lender that there’s a problem in balancing your monthly budget. Try to avoid using payday loans. After all, in some circumstances they can prove useful, but overall, they’re a solid way to increase debt if not managed very carefully.

Your Current Income

To obtain credit at a future date, you need to demonstrate you are pretty decent at managing your debt. Plus, you’ll have to show that you have a reasonable income, too. With a steady income and a record of repayments on a new loan, irrespective the loan may be extremely small, your credit record is going to see no-end of improvement.

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