Bad Credit Rating Loan Focus – 3 Things to Avoid

Every day, thousands of people in the UK go online and type ‘Bad Credit Loans’ into Google, in search of a company who will lend them money despite their poor credit rating.

Let face it, with a poor credit history your options to borrow money are more limited, and therefore many companies have seen this as an opportunity to take advantage of people with ‘dodgy’ lending practices and charging exorbitant fees and driving people deeper and deeper into debt.

So when you are on the internet looking for a ‘poor credit options’; what are the things that you should at all costs avoid:

Avoid Companies Without A Consumer Credit License

FCA-logoA Consumer Credit License (CCL) is issued by the Financial Conduct Authority (FCA).

The FCA is a UK Government body that offers some protection just in case something goes wrong; to find out a companies CCL just look in the footer of their website.

If you borrow money from a company without a CCL you will have much less protection if something goes wrong; for example a lender advertises on their website an interest rate of 100% APR; but when you take the loan out you realise that in fact they are charging you 1000% APR, if they do not have a CCL you could have much less back up.

Plus, do you really want to be dealing with a company who is not professional enough to get a Consumer Credit License; especially when there are many other companies out there who offer great finance options and do.

Check if a firm can offer loans and credit

The FCA now offers a Consumer Credit Register of firms that were licensed by the OFT and have what we call ‘interim permission’ to continue offering loans and credit business.

If you deal with a consumer credit firm that does not have interim permission you will not be covered by the Financial Ombudsman Service if things go wrong.

Keep Your Options Open

There are a variety of online finance options available to you. Pay day, doorstep and guarantor loans are some of the most popular options and there are many more asides. It is easy to be swamped by the options; though by doing a bit of research up  front you could save yourself the heartache and stress of an extremely expensive option, which you cannot pay back and a lender who could also be heartless and aggressive in chasing for payment. Although to avoid this, all you need to do is a little bit of work and shop around;

  • make a few applications
  • compare the costs
  • compare the professionalism of each company

Applying through will make sure that you application is sent immediately to our panel of professional lenders, you will then receive multiple offers to compare within minutes of making your application.

For those who need to borrow, some of the current options can be vicious – even the best deals have more tricks than Paul Daniels’ sleeve.

Borrowing should always be budgeted for, and carefully planned, so you know how you will afford the repayments.

Martin Lewis
Money Saving Expert

Testimonial Martin Lewis

Avoid Just Focusing On the Money You Need & Speed

When a financial crisis hits, it is very difficult not to just focus on the money you need and the speed in which you need it.

This type of thinking can often lead to bad decisions; such as taking out expensive options that in the long term may increase your financial worries.

So instead we would recommend taking a deep breath and thinking about your situation, focus on how much you can afford to pay back, then think about the absolute minimum amount of money you need to get by and borrow.

Would you like to get a range of offers?

We have done all the hard work for you already by selecting a range of quality lenders.

Our process is simple

  • one free no obligation free application
  • this goes to multiple quality lenders
  • you then start receiving quotes and you are free to decide which one is best for you (or not)

Look at our calculation slider and work out the amount of money that you can afford to borrow based on the actual amount of money that you can afford to pay back.

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