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A bad credit history doesn’t mean you can’t access loans and credit cards. Here’s what you need to know about your options.

Frequently asked questions

Why do I have a bad credit score?

Your credit score will be affected if you have:

  • Failed to stick to a credit agreement
  • Made late or missed repayments  
  • Been declared bankrupt  
  • Have County Court Judgements (CCJs) against you
  • Entered into an Individual Voluntary Arrangement (IVA)
  • Never borrowed money before

A bad credit score doesn’t mean you can’t get a loan – it just means you’ll need to compare your options carefully.

How can I improve my chances of getting credit?

  • Check your credit report – Get in touch with Experian, Equifax or Callcredit – the three main credit reference agencies – and make sure all the information held about you is correct. Amend anything that’s wrong.
  • Get on the electoral register – Lenders tend to use this to confirm your identity and your address, so registering to vote can help your application.
  • Use an eligibility calculator – Applying for credit means lenders have to undertake a hard credit search, which leaves a ‘footprint’ on your credit file. So if you’ve been rejected, this will be visible to other lenders and they could be less likely to approve you. Check your eligibility before you apply. Many lenders allow you to do this.
  • Try to stay 50% below your credit limit – Lenders will check how much credit you still have available so if you’re constantly at the limit of your overdraft or credit card they may be put off.
  • Close any credit cards you don’t use. If you have a lot of access to debt, potential lenders can be put off too.
  • Repay on time – Repay regularly and within your credit limit. Even a mobile phone contract shows you can maintain a financial agreement and it can negatively impact your credit score if you don't pay at all or are repaying late.

What sort of bad credit loans are available?

If you don’t have any assets as security, such as a house, then one option is an unsecured personal loan. With this, you can borrow money at a fixed interest rate and pay it back over an agreed length of time.

A secured homeowner loan uses your home as a guarantee - if you don’t keep up with repayments, you could lose your house.

A guarantor loan is when a friend or relative promises to pay back the loan if you can’t.

What are the other options?

Most loans start at £1,000, if you don’t need to borrow that much, then consider a credit card.

Credit-building credit cards allow you to build up your credit history by borrowing a small amount of money – between £100 and £1,000.

Alternatively consider an overdraft to your current account, or compare current accounts and switch.

How can I compare loans?

Just enter the amount you want to borrow and you can see what’s on offer. You’ll be able to see in the details which lenders are happy to lend to people without a good credit history. Our easy-to-use comparison tool lets you choose from a list of loans that match your criteria in a simple and clear table. For each loan available, we’ll highlight all the key features, as well as let you know what you need to apply.

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