Bad credit loans

Monday, 13 November 2006 12:15

A bad credit loan is a loan designed for someone with a poor credit history or county court judgements (CCJs) and is therefore refused unsecured personal loans by many providers.

Credit histories monitor how good or bad someone has been at paying back their debts, with borrowers with the best record receiving the lowest rates.

However, once credit scores drop below a certain level potential borrowers are often refused credit by mainstream lenders.

Bad credit loans are specifically designed for consumers that are refused elsewhere.

They typically charge a higher rate of interest, but a borrower who takes one out and repays it promptly can improve their credit rating and therefore secure better loan rates in the future.

An estimated one Briton in five has a bad credit rating.

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