Bad Credit: Don’t Let It Hold You Down

| February 12, 2013
Bad credit score

Bad credit score

A bad credit score is something which is never going to be beneficial to your financial health. If you have poor credit, there are a number of consequences including the fact that lenders will be less likely to loan money to you, and those who do will require significantly higher interest rates.

Because of the uncertainty in the world’s economic climate, this is the time where you need to be extra careful about your spending and repayments in order to avoid adding to your debt, and do your homework on any new types of loans or credit. There are a number of different sources which you can use to borrow money for little cost.

Peer-to-Peer Lending

If you are having trouble obtaining credit from a traditional lender, then perhaps peer-to-peer lending is an option which you need to check out. Made popular in recent years thanks to a number of websites which facilitate it, peer-to-peer lending connects individuals with money to lend with consumers looking to borrow – all with less rules and lower interest rates than normal financing methods carry.

Family and Friends are Helpful Too

This is one of the most dangerous ways to go about borrowing money when you need it. Family and friends know you better than anyone, and are more likely to trust you with their money – as long as you are reliable. Unlike credit card companies, these people will be with you for life so it is not wise to have any trouble with your repayments. As long as you are always prompt in paying back your loans, family and friends can be a great backup source of emergency funds – especially once you’ve gained their trust through financial responsibility.

Do You Have Collateral?

If you have any assets in your name – a home, car, boat, jewelry or nearly anything else of significant value, there are many different lenders which will offer you a loan while accepting your assets as collateral. While things such as your home and car can be used for longer-term loans, most items of lower value will provide you with only short term monetary relief.

Try Credit Unions

When commercial banks have not been very helpful in providing you with a loan due to your bad credit, then perhaps you should turn to a credit union. Credit unions are known to be less strict with their criteria for loaning funds, and often times will take more factors into consideration than other lenders. Thanks to their personal touch, credit unions are often able to make loans or provide credit where other banks cannot.

Another Option: Guarantor Loans

If you are in need of quick, same-day funds yet have bad credit, then most options are not going to work for you. Another option is guarantor loans which can get you a small loan nearly immediately. Companies like GBP Loans can even provide this type of lending to someone with poor credit.

To obtain a loan, all you need to do is find a guarantor who is willing to sign alongside with you. Family members and close friends with good credit are often the best choices here, and will often times be much more eager to co-sign with you than to loan you money directly. Repayment rates on these short-term loans are lower than a number of different options and they can be a savior for anyone with bad credit who faces an unseen emergency.

In today’s economic climate, the market for loans is facing a lot of demand. More any more consumers who have had credit issues in the past are now trying to find sources of money to face life’s unexpected expenses. Many people are accepting any offers presented to them and because of such are inadvertently getting themselves into even more financial trouble. When looking for financing options, be sure to read the fine print and be aware of all of the terms and conditions of the loan in order to avoid even more debt and credit issues.

Hugh Tyzack is Managing Director and founder of GBP Loans Limited, which was formed in 2008. GBP Loans specialises in no fee Guarantor Loans, check his website for more details. Follow Hugh on Twitter @GBPLoans and also on Google+

Bad Credit: Don’t Let It Hold You Down

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