Bad Credit Myths You Shouldn’t Believe
Our loan advisors hear all kinds of myths concerning bad credit. We’ve picked the three most common and discussed why they aren’t true here.
In this article, we'll cover bad myths you should not believe:
- "I’ve never borrowed, so I must have good credit"
- "I must clear my debts to repay my bad credit history"
- "I must have bad credit due to having lots of debts"
- "My credit score is poor, so I need a debt consolidation loan without a credit check"
- I have bad credit – can you help me find debt consolidation loans for bad credit?
If you’ve been told you have bad credit, you might believe that a range of financial options are closed to you. From acquiring loans for bad credit, to debt consolidation, the idea of obtaining these can seem out of the question if you have a poor credit rating.
However, the reality is quite different. Here are some common myths we hear all too frequently:
01. "I’ve never borrowed, so I must have good credit"
Many believe they automatically have a good credit rating because they have no borrowing history and have never been in any kind of debt. Unfortunately, this is not the case.
A credit score for individuals is built up by a combination of factors but one of these is lending history. This provides prospective lenders with information on how likely the borrower is to adhere to the agreement and repay the finances provided to them. Therefore, some degree of lending – and repayment – needs to take place to start building a credit score.
02. "I must clear my debts to repay my bad credit history"
Although repaying your debts is a good move, making the repayments on existing debts is often a better way to improve bad credit. One of the worst things you can do to jeopardise a credit score would be to either be late with or miss the repayments.
Looking for loan places for bad credit may help you better manage your finances, by clearing your existing debts leaving you with one monthly manageable repayment.
03. "I must have bad credit due to having lots of debts"
Actually, this is quite the opposite. When repayments are made on existing debts – on time – the credit score on record is likely to be pretty good. To sustain this score, all you need to do is to keep paying each month.
04. "My credit score is poor, so I need a debt consolidation loan without a credit check"
No lender can offer you a loan without first completing a credit check. Credit checks help the lender to ensure that the repayments are affordable to you. Without completing these checks, the lender would be borrowing money irresponsibly and could find themselves being fined by the UK regulated.
Even with very poor credit, debt consolidation loans may still be available to you however, some lenders may require a guarantor to approve your application.
I have bad credit – can you help me find debt consolidation loans for bad credit?
If you have bad credit, then we will certainly be able to help you on your search to find the cheapest debt consolidation loan available to your circumstances. Bad credit isn’t automatically a disqualifying factor with us, so get in touch today and find out if we can help you with debts.Get Debt Consolidation
APRs from 5.8% to 89.9%
We are a broker, not a lender.
Unsecured Loan Representative 69.9% APR
Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.
Secured Representative 11.7% APR
If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.