What Is a Bad Credit Loan?
A bad credit loan is designed for people who’ve had bumps in their credit journey. Maybe your credit score is low, or your history is short - either way, some lenders may still consider you.
Loans for bad credit in the UK work the same as any other, but lenders may offer tighter limits or higher interest rates. You can explore loans for bad credit, no-guarantor loans, poor credit loans, and bad credit car loan options if you’re in the market for a motor.
What Is a Bad Credit Score?
A bad credit score usually means your credit history has experienced some challenges, which can make lenders more cautious. If you’re exploring bad credit loans, knowing your score can help to set expectations.
Credit scores can be on the lower side for all kinds of reasons - here are a few common causes:
- Missed or late payments
- Defaults or County Court Judgments (CCJs)
- Bankruptcy or Individual Voluntary Arrangements (IVAs)
- High levels of existing debt: Lenders view this as higher risk, which can limit loan options or increase borrowing costs
- No credit history
- Not being registered to vote
- Frequent address changes