Bad Credit - A term used in credit scoring
Bad Credit is a UK term used to describe a low rating in credit scoring due to a poor credit history. Repayment defaults, County court judgements, mortgage defaults, loan arrears lay on the consumers financial record and lead to a poor rating when a credit check is done. Credit checks are carried out in the UK in order to determine what sort of risk you are to the lenders. If you have had difficulties paying monthly payments in the past and fallen into debt, then you will probably have a bad credit score which means that lenders will look upon you as a higher risk for future finance. Bad Credit Mortgages and Bad Credit Loans are loans for people who have a bad credit score.
Bad Credit Example - Bad Credit UK Tenant Loans
These sort of loans are tailored for people who have a bad credit score and who have had financial difficulties in the past. These loans are not standard loans they are used for people who are unable to get the usual high street secured loan. If you have a non-status credit rating and you are not a homeowner then you can still get finance through an Unsecured Tenant Loan or Unsecured Loan. Unsecured Loans usually have a higher APR as a result of not having any security for the lender.
Bad Credit Information
Borrowers will be able to find credit to suit themselves even with a bad credit score. Lenders are able to find out your credit score before deciding to lend you any finance. There are loan providers online that specialise in lending to people in this situation. Having an bad credit rating will mean that lenders will look upon you as being of greater risk to them as you have probably defaulted on payments in the past. Lenders will probably charge a higher rate of interest in order to take this risk. It is in your best interest that you do not default or pay any monthly repayments late on an unsecured loan, in fact if you keep up payments you will serve to improve you credit rating for the future. This means that you find it easier to obtain finance in the future.