Your credit score plays a major role in your financial future. With a bad credit rating, you won’t be able to get a loan or line of credit. Your credit score is a number that is calculated by credit reference agencies. The score is calculated by taking your personal spending habits and financial information into consideration. In the UK, there are various credit reference agencies including Equifax, CallCredit, and Experian. Your credit score will vary slightly from one credit agency to the next. While you might struggle to get a traditional bank loan with a bad credit rating, you can still qualify for loans with no credit check.
Credit Scores Vary from One Agency to Another
In the UK, it’s important to understand that not all credit agencies offer the same scoring system. For instance, the average Experian credit score in the UK is 757, while with ClearScore it is 380. This does not mean that with one lender you have a great score and with another, a poor one. It simply means that the scores are tallied differently and mean different things. It is up to lenders and credit providers to know what these scores mean and translate them correctly. There is no universal credit score table to compare these figures to.
Improve Your Credit Score
The statistics show that a vast majority of the UK population is living with bad credit. These individuals should be looking for ways to improve their credit score and work their way towards a better financial standing. If your credit score is less than perfect, you may want to learn how to live with it so that it doesn’t impact too negatively on your life. It’s important to take steps to improve your credit score – and the time to take those steps is now!
We have listed 5 ways to do this below.
1. Scrutinise your credit report
You shouldn’t simply take for granted that your credit report is correct and up to date. This could work against you in the long run. Perhaps you are still suffering the consequences of a debt you had 10 years ago, which could now be cleared from your credit history. It’s important to check that you are only being judged on the details that are 100% correct. Sometimes credit agencies get the details wrong, so make sure that you check your credit report for potential mistakes. Update your personal details and report any discrepancies on bills that you have outstanding. Don’t allow your credit rating to be calculated on incorrect information (or old information).
2. Only apply for credit or loans when you really need them
Applying for credit or loans frequently will result in a number of credit checks being carried out against your name. When this happens too often, it can affect your credit score negatively. If you only apply for credit every once in a while, only when you need to, your overall credit report will reflect that. Applying for loans with no credit check is one way to minimise the occurrence of credit checks against your name. Make sure that you aren’t applying for a loan or credit “just because”. This is a sure way to quickly get yourself into ongoing unnecessary debt. The idea is to live a lifestyle that doesn’t always rely on credit.
3. Be responsible with monthly payments
Just because you have a bad credit rating, it doesn’t mean that you must give up and let things run their course. Now is the time to turn things around by handing your monthly expenses with a more calculated and responsible approach. You can work towards building a better credit rating, by being meticulous with your monthly expense payments. If you let your bills and accounts go over due, your credit score will be negatively affected. Paying your bills on time every time is a great way to improve on your credit score. This includes bills such as your cellular phone bill, utilities, clothing accounts and similar. Work out your budget and make sure that you stick to payments. Try to pay a day or 2 early to ensure that it doesn’t get missed on your bill.
4. Take out a small short-term loan to boost your credit score
How can you prove that you can be trusted with a big loan? By handling smaller loans perfectly – that’s how. If you take out a small, affordable loan and pay it off quickly, it will reflect positively on your credit report. Do this a number of times and it will show just how responsible you are with credit and paying your bills. With credit scores and ratings, it’s all about proving yourself. The more responsible you show that you can be, the better it will be for improving your credit score. To avoid being rejected, it’s best to apply for loans with no credit check.
5. Take on extra work and sideline hustles to pay off debt quicker
If you are simply paying the minimum amount due on your loan or credit card each month, you will just be servicing the interest and your loan will take a very long time to settle. If you can earn some extra money and pay more into your loan or credit card each month, it will show that you are able to afford your monthly instalments and that you can handle your debt responsibly. The more you pay off on your loan ahead of schedule, the more positively your credit rating will be affected.
No Credit Check Loans – Quick & Easy to Apply
If you are interested in applying for loans with no credit check, you simply need to meet with the lender’s requirements. In the UK, applicants must be over 18 years of age, must be a citizen of the UK, and must have a stable income of 750 pounds or more per month.
One of the major perks of these types of loans is that the approval (or rejection) is provided within just 15 minutes, so you won’t be kept waiting around. Another benefit is that it’s not just your credit rating that impacts on the final decision. These are called no credit check loans because more is taken into consideration than just the credit rating. With a bad credit rating, an affordability assessment and proof of regular income can still ensure that you qualify for the loan. And that’s a major relief and convenience for those who find themselves in a financial dilemma.
Follow the above tips for those with bad credit and work your way up to a better financial credit score and standing in good time.