If you have applied for a loan and been rejected it can be disappointing, but it might be worth thinking about why your application was rejected. Perhaps your credit file could do with a little work to improve it. But what exactly is bad credit? You might be asking yourself: How did I end up having a bad credit file and can I improve it? You most certainly can, but you need to know how you got in that situation in the first place so you can avoid it from happening again in the future. Some common causes for having a low credit score are:

  • Late repayments
  • Defaults
  • County Court Judgements
  • An IVA, DMP or DRO
  • Bankruptcy
  • Too many credit checks or rejected applications

You might be thinking “But I have never borrowed money before and I’m still getting rejected”. Well, yes, if you don’t have a credit record or you have a limited one, also known as a thin credit file, lenders don’t have much to base their judgement on, which might lead to you getting rejected. This might be your case if you:

  • Have never taken out credit
  • Have never opened a bank account
  • Have recently moved to the UK, as credit history is not transferable across countries

So, does my bad credit record mean I won’t be able to get a loan? Luckily the answer is: no. You’ll be happy to hear that there are types of loans that are specially intended for people who have a bad credit file or a poor credit history.

What is a bad credit loan?

Bad credit loans are a form of unsecured credit aimed at people with bad credit files, whether that is because of a poor credit history or a thin credit file. People who belong in this group might find it hard to take out a loan from banks and low interest rate lenders because they can be seen as unreliable. But it would be unfair to judge someone’s current financial situation on their financial past, right? You could be in a much better financial position now, where you know you are perfectly capable of repaying a loan.

This is why bad credit loans exist: to fill that gap and make it easier for people with a bad history credit to rebuild their credit file. At cashasap.co.uk we have two types of short-term loans that may be suitable for your financial circumstances.

  • Payday Loans

A payday loan is a small loan that you repay on a specific, agreed date. This will usually be your next payday but it can be any date within a 35 day period that is suitable for you.

  • Multi Month Loans

Multi month loans are a type of loan that you repay in instalments across multiple months. This means that you will likely pay more than if it was a payday loan, as you borrow the money for a longer period of time, but the repayments might be more affordable as they’re spread out over 3 months.

Criteria for a bad credit loan

It’s important to understand that when you apply for a loan, lenders will check your credit history to assess your credit score The credit reference agencies keep track of information, including your credit commitments, and give you a credit rating score. Simply put, the higher your credit score, the higher the creditworthiness according to the credit reference agency.

Even though lenders may be cautious about lending to customers with bad credit files, not every company has the same lending criteria and some might be more comfortable with the credit risk than others. If you want to get a better idea of how companies see you, you can check your credit rating online for free.

Your credit rating affects your chances of being approved for:

  • Credit cards and loans
  • Mortgages
  • Car financing
  • Gas and electricity monthly payments
  • Mobile phone contracts
  • Insurance monthly payments
  • Property rentals

How can my credit file be improved?

Even though lenders don’t base their loan application decision exclusively on how your credit file looks, it’s always a good idea to improve your credit score when possible.

Some top tips that might help you increase your credit rating and make it easier to get credit in the future include: signing up to the electoral register, making your repayments in full and on time, using credit cards responsibly, having a phone contract in your name and repaying any outstanding debts before obtaining more credit.

Why is cashasap.co.uk a good option if I have a bad credit file?

cashasap.co.uk is a direct lender that believes that your past shouldn’t define your future. Life is full of unexpected surprises and even those with a stable financial situation can come across unforeseen expenses.

So if you’ve had a larger priority bill than expected, your washing machine broke and you need to buy a new one or you recently changed jobs and your paydays don’t line up, our same day cash loans might save the day!

Although we understand that not everything always goes according to plan, failing to meet your loan repayments on time can cause you serious money problems. It’s important to understand that you should only apply for a loan if you truly need it and if you know you can afford your repayments.