When you have bad credit, it can feel like a lot of things are out of your reach. So many of the purchases we make and the deals we sign require a credit check. Even if you are planning to use cash for the purchase, a credit check may still be necessary. So, what happens if you find yourself in a situation where you want to borrow money? Is it even possible to get a loan with bad credit? Let’s take a closer look.
Thousands Are in the Same Position
It can be helpful to note that you are definitely not alone in your situation. There are many people suffering from bad credit right now, and just like you, they need to be able to access funds. Loans for bad credit can be hard to come about if you don’t know where to look. Bad credit not only makes it hard to access funds; it also tends to cost you extra money.
According to The Cost of a Poor Credit Rating study, poor credit costs UK people more than £3.5 billion per year. It works out to about £1,170 per family with low credit. That is money that could certainly be used elsewhere.
Look for Places That Offer Bad Credit Loans
While you may not be able to stroll up to the bank and get a loan, there are places you can go to access funds even if you do have bad credit. Short-term credit solutions exist with what is known as payday loans. With these places, you can access a loan on a short-term basis with an approval process that is usually quite fast. These loans aren’t big; they are just meant to cover emergencies until you have the funds, but you need to be able to pay back the full amount on time, plus the interest/fee.
For many people, these loans for bad credit can be the perfect solution. It’s quick, relatively easy, and it gives you the funds you need.
Work at Improving Your Credit Score
Of course, the ideal situation is that you’re able to get a loan anytime from any financial institution, but for that to happen, you need to improve your credit score. There are a number of ways you can do this, all of which will be effective.
First, you’ll want to check your credit report to make sure everything is current. You never know, there could be errors on it. Next, you need to get a credit card, so you can start to build good credit. It may be necessary for you to get a secured credit card, but not to worry, it still counts. You will want to be sure you’re paying all your bills on time and not missing anything, and also work to pay down any debt you may have.
Over time your credit score will improve, but in the meantime, at least you know you can still access a loan if you need money for an emergency.