Applying for a loan with bad credit – is it possible?


If you have a poor credit record, you may feel that you are at a dead end when it comes to gaining access to credit. A rejected credit file will leave another mark on your credit file, which only goes to hinder your situation even further. This vicious cycle leaves many people feeling low and at a total loss as to what to do.

BUT – it isn’t all doom and gloom.

Some lenders will offer loans to people with bad credit. If you can apply for these, you may be able to use the loan to consolidate debts. MoneySupermarket says “A bad credit loan can be used to consolidate any debts you have into one monthly repayment and potentially lower the interest you’re paying on the debt as a whole. But you will need to make sure you’d still be able to afford the monthly repayments with the new loan deal.”

If you cannot get a bad credit loan, you may be able to improve some things on your credit file to enhance your chances.

Short term loan provider Wonga suggests checking on your credit file regularly as a poor score can affect your borrowing potential. You can often do this for free, or pay a small fee for access to enhanced information. A credit file is a very useful tool and checking on it once a year is a great way to manage your credit picture. It doesn’t take long to improve your credit file either – in some cases, just 6 months to make a positive change. You can start off small, by removing unwanted accounts linked to your name, for instance. You can also make sure all your personal information is up to date. Inconsistencies can look bad on your part and this simple change can help to ‘clean up’ your credit file.

However, if you have some bad black marks on your file, like, for instance, you were bankrupt, then this will take more time to improve but it IS possible.

For instance, some loans can survive a bankruptcy because the lender is entitled to at least the value of the collateral. These are called reaffirmations and they can go a long way toward rebuilding a credit score. However, they only work if you make the payments on time so ensure you really keep on top of this.

It is also worth noting that you do not need a credit repair agency to do this work for you – you can do this all yourself. A credit repair agency will not be able to remove anything negative from your file if it is true, and so could be a waste of money in the long run. However, if you were a victim of fraud, check this resource -they could be useful in this instance.

Remember that this all takes time. You cannot fix a bad credit score overnight, but there are steps you can employ to restore it so that you can apply for that loan you need.

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