Obtaining a loan or any type of finance can be a real challenge. If you’re someone with a bad credit history and you are trying to get a secured loan or buy a house, you will usually have to do a bit more work to find a lender prepared to lend you the money. You will also have to pay a higher interest rate than someone with a clean credit history.

What Is Credit History?

Before you go looking for a loan, it is crucial that you know more about your credit record. This is a recording of all your past financial commitments and contains information about your repayment reliability and the total amount of debt you are carrying.

Your credit record is used by lenders to determine your creditworthiness. Lenders will assign you a credit score or rating. The higher your credit score is, the greater the chance you are of getting a loan with a low-interest rate.

How Did Your Credit History Go Bad?

Your credit history is a continuous record of information about you and your finances. If you’ve missed or made a late payment it is captured in the file. This is the same if you have ever defaulted on a debt or failed to fulfill a financial contract.

Everything is captured in this record, missed mortgage payments, repossession, bankruptcy, CCJs, IVAs, credit card defaults, etc.

Credit reporting agencies gather other information about you, such as employment changes and changes in your home address. If your credit record shows that you make such changes often this will also be revealed in your credit report.

Will You Ever Qualify For A Loan?

Generally speaking, you will still be able to get a secured loan or mortgage, but there might be certain restrictions on your borrowing. Because of today’s culture of debt, there is an ever number of increasing lenders who specialize in loans for people with bad credit. Just remember that with bad credit you will probably be charged a higher interest and possibly be limited in the amount you’re allowed to borrow.

The positive part of this is that once you have secured the loan you can start repairing your poor credit history by making regular, on-time payments. It will take a little time to improve your credit history, but it will happen.

What Type Of Loan Can You Get?

You have the option of going for a secured loan or unsecured loan. Unsecured loans usually have higher interest rates because you are not required to put up collateral as security for the loan. Because the lack of collateral makes the loan riskier for the lender, you should expect higher interest rates and more strict loan terms.

On the other hand, secured loans require you to provide collateral. Collateral can be a property you own. Usually, the loan is secured by your home. The amount you’re allowed to borrow and the interest rates you’re offered will be determined by your credit history, the total debt you have already, and the value of your home.

Different lenders weigh these items different ways, so be sure to check with several to find one with a product suited for you.

Where Do You Look For A Bad Credit Loan?

Before you take a loan, it’s wise to research a number of different lenders and brokers. Compare interest rates they offer you, any special loan terms they may require, and any other specifics about their loan process.

Generally, if you have an adverse credit history the best way to source a good loan is to use an online lender. Make sure that they are not tied to one lender but have access to a large panel, such as tcaloans.com.

There are a large number of both secured and unsecured loan lenders in the US, some are ethical others not so much, so make certain that you carefully review all details before making a final decision.

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