In the past few years there have been a lot of press stories about the increasing number of people who have bad credit.
The global economic crisis has meant that lenders have had to tighten their rules on the collecting of payments for credit meaning that many people have had bad credit marked on their credit file for relatively minor indiscretions. Lenders have also started scrutinising people’s credit files more than perhaps they would have done in the past to offer a loan.
The bad credit loan industry has grown as many of the high Street lenders and banks now have such strict criteria that most people cannot approach them when they need to borrow money. If you’re trying to get your finances in order it’s now easier, even if you do have bad credit there may be a loan to help you get things back on track.
So what is bad credit?
The problem with bad credit is that it’s all in the eye of the beholder. Different lenders read your credit file in different ways and as there are two main credit agencies, something which shows us a missed payment or bad credit with one agency such as Experian may not show up on a credit search the other main agency, Equifax. Stuart specialises in bad credit unsecured loans by ukhomeandpersonalloans.co.uk and had this advice to offer: “if you’re unsure about your credit it’s easy enough to find out. You can get your credit file from either of the two credit agencies for a couple of pounds. Once you get it, reading it may be the difficult part as it’s not always easy to understand what the file means to you and your credit profile. Getting in touch with a specialist adviser at this point is invaluable!”
Bad credit can be marked on your profile or credit file for a number of years and may have come from a seemingly minor missed or delayed payment, often from something you didn’t even realise would appear on your credit file. Store cards and catalogue cards have been very easy to obtain and many people didn’t necessarily realise when they took them that they were credit in the traditional sense, so if you missed a payment thinking it wasn’t the end of the world, you might be shocked to find out that it’s now affecting your ability to borrow.
Who has bad credit?
The reality is that people from all sections of society, often through no fault of their own, have bad credit marked on their credit search.
“This Is Money” suggest that up to 25 million people in the UK have poor credit.
High Street banks and lenders aren’t particularly forgiving of any missed payments which may have occurred regardless of whether there was a legitimate reason for the missed payment. One such reason is that fraud had been experienced on your main bank account and as a result, all direct debits and standing orders had been cancelled whilst the fraud was investigated. With identity theft as prevalent as it has been, this is becoming a regular occurrence and unfortunately it’s not as easy as you might hope to ask a lender to remove bad credit entered onto your credit report in error.