14 Jan

How Tenant Guarantor Loans Work

Just because you have bad credit doesn’t mean you can’t avail a personal loan when a financial emergency strikes. You may not be able to avail traditional personal loans but you can beat your credit problem with guarantor loans. But before you get too excited and sign up for a deal, here’s a quick guide to how the financial product works for better understanding.

What are guarantor loans?

Guarantor loans, as its name suggests, is a type of unsecured loans where you can borrow between £100 and £12,000. The best part with guarantor loans, you can avail the financial product even with bad credit under your belt. So long as you’re of legal age and you have a guarantor to co-sign the debt agreement, you’re application is good as approved.

Guarantor loans are also widely known as non-homeowner or tenant guarantor loans. While other personal loans require borrowers to be a homeowner, you are still eligible to apply for a guarantor loan even if you’re a tenant. For more information on tenant guarantor loans, extensive guidelines are available from the original source.

Who can be your guarantor?

With tenant guarantor loans, your credit score doesn’t matter. What does matter is your guarantor’s eligibility. To be able to borrow money, you must have a guarantor who can be a family member, a friend or a colleague. He or she must be of legal age, a UK resident and more importantly must have good credit. The guarantor will be required to co-sign the debt agreement with you, which essentially guarantees your monthly repayments.

If your guarantor is a homeowner, you can borrow money greater than £7,500. If your guarantor is a tenant just like you, loan offers are less than £7,500.

How guarantor loans work?

As mentioned, a guarantor’s loan main requirement is for the borrower to bring a qualified guarantor. Depending on your guarantor’s eligibility, you can borrow a short-term loan between £100 and £750, a medium or long term loan between £500 and £7,500 and loans greater than £7,500.

Without any credit check required for borrowers, approval is often fast and quick for guarantor loans. Your guarantor just needs to guarantee your application and approval should be confirmed in 24 hours or less. As per the debt agreement, your guarantor agrees to guarantee your repayments. This means that risks are little to none for your lender. In the event that you cannot repay the loan, they will run after your guarantor as per the debt agreement.

Why choose guarantor loans?

If you have bad credit and you need quick cash, a tenant guarantor loan comes handy. The loan product is widely available and accessible online. The requirements are also very minimal allowing more borrowers to avail the financial product. But more importantly, guarantor loans exist to cater specifically to people with bad credit problems. If you’ve been struggling to get short-term financing because of bad credit, guarantor loans are the answer to your financial emergencies. Provided that you have the requirements ready prior to applying, you can get approved in as fast as 24 hours or less.

04 Jan

Ultimate Guide to Credit Rating

Most people with bad credit scores want to improve their credit rating. There’s just one major problem. They don’t know where to start. Considering that the road from a bad credit rating to a good credit rating can be long and complicated, it’s really important to know where you stand in the first place.

Before you can improve your credit score for the better, there are two things you need to do. One is to check your credit reports and scores. And two, you need to understand the key factors influencing your credit score. This guide will help you understand how your credit rating is formulated.

What is a credit score?

Your credit score put simply, represents your creditworthiness as a borrower or consumer. The score falls in a range depending on the type of score used. If it’s a FICO score, for example, the credit score range is from 300 to 850. If your score is 300, that means a poor credit rating while 850 means excellent credit rating.

When you have a poor credit score, it follows that your creditworthiness is very low. This translates to high risks for lenders hence a likely rejection of application for personal loans, mobile phone contracts and other financial products.

What are the elements of your credit score?

Sticking with the FICO score as example, it is broken down into five different elements or categories. These categories are what affect your credit score and they include:

Payment history

35% of your credit score is attributed to your payment history. This is why experts continue to reiterate time and time again why it’s very important to pay all your bills on time. If you want to boost your credit rating or keep it at an excellent standing, paying your bills on time is a must. Remember, it contributes the most percentage to your credit score. It’s no state secret really. Pay your bills on time and your credit score is safe.

Amount of debt owed

The amount of debt you owe is another important aspect of your credit rating. In fact, it is 30% of your credit score. When checking your credit score, most lenders or financial institutions look at whether you’re close to your credit limits or not. If you want to keep your credit score on the excellent side, it is advisable to keep your balances low or your amount of debt owed low in general.

Credit history

The age of your credit history is 15% of your credit score. If you have older accounts, those are actually better for your credit. If you’re just starting to build your credit history, there’s no other way around to it. In any instance, the trick is to build credit like any responsible consumer would. So long as credit references see that you have a good history, your credit score will be an asset for you.

New credit inquiries

Though credit inquiries only make up 10% of your credit score, these inquiries still affect your credit rating. Whenever a lender or financial institution reviews your credit rating, there’s an inquiry created. Limiting you credit inquiries makes sense if you’re in the process of boosting your credit score.

Types of credit

The last category that constitutes 10% of your score is the types of credit you have. If you want a high score for your credit rating, having a mix of different types of credit will help. This means that you’d do well if you have a diverse type of accounts such as mortgages, credit cards, auto loan and more.

31 Dec

What You Need to Know about Credit Rating

For most people, just the mention of credit rating or credit score makes them shudder. With the confusion, misinformation and misconception associated with credit rating, you can’t really blame consumers. When you’re confused, however, the ones that benefit the most are the creditors.

With a little effort, credit rating is not all that hard to understand. To help you along, we’ve created a list of credit rating myths to get you started.

1. There is no such thing as a universal credit rating.

Maybe you’ve heard it before. You are blacklisted to apply for a financial product because of your poor credit score. That’s a complete myth. You don’t have a single credit score because different lenders actually score you in different ways. If one lender, for example, has rejected your loan application, it doesn’t mean you’ll end up with the same fate from another lender. If you’re rejected, keep applying from other lenders. Who knows, you might just get lucky and avail the personal loan that you badly needed.

2. Lenders check your credit score to predict your future behavior.

One of the main reasons why lenders check your credit score is so they can foresee how you’ll be as a payer. Depending on your history, creditors use the data to try to predict future behavior. If you have a poor credit history, then you need to take the long road and build one from scratch.

3. Lenders are often all about profit.

Even if you have a perfect credit score, you can still be rejected for a financial product simply because lenders may not make more money with you. If you’re always repaying your credit cards in full each month, there’s a likelihood lenders will reject you against because of profitability consideration. Even if you have bad credit, it doesn’t always mean rejection provided that lenders see that they can earn money from you in the long run.

4. Lenders consider other details more than just what is on your credit file.

If you want to present yourself as borrower in the best light, it will help to know that lenders consider more than what’s on your credit file when assessing your application. Like with any application, you’ll be required to fill out a form. At this point, lenders will be looking at your income, billing address and other key factors such as family size. Lenders also look at your previous transactions with said lender, fraud date, rent payments and more.

5. Lenders do not know it all about you.

Some people fear that all the details of their life are on their credit file. That’s a complete myth because credit files are basically just financial data and information about your spending, borrowing, etc. Contrary to what some believe; key information such as student loans, council tax arrears, parking fines, declined application, savings accounts, medical history, etc. are actually not on your credit files. Lenders have no access or knowledge of them in other words.

6. Lenders use your credit file to dictate the interest rate you’ll get.

Most credit providers if not all use your credit rating as basis for the rate you will get for a financial product such as a personal loan. This means that the risk you pose is directly proportional to the rate. If you’re a high-risk customer, it then follows that your rate will be higher as well. Even with bad credit, you are still eligible for loans and other financial products. The hitch, you’ll be charged a higher interest as dictated by your credit score.

27 Dec

How to Improve Your Credit Score Fast

Whether you’re applying for an auto loan, mortgage or you’re hoping to avail a mobile phone contract, there’s no denying the fact that your credit score is a major consideration for your approval. Consumers with bad credit scores under their belt often struggle to get approved for these financial products because of their low creditworthiness. To address the problem, there’s really just one solution. Boost your credit rating and you’ll have better chances of snatching great deals at a more affordable cost.

To help you improve your credit rating, here are quick and easy ways to do it:

Check your credit files

Ideally, you need to check your credit files annually. You can do it for free too from popular credit file providers online. When checking your files, the goal is to look for errors, inaccuracies and discrepancies. One error can wreak havoc on your credit rating. It’s important to check your files so you can report any errors if there are any.

Register to vote if you haven’t done it yet

You are less likely to get any credit unless you are a registered voter. You can register online through UK’s electoral roll website. Doing so will take a few minutes to complete where you’ll just need to answer a few questions and fill out a form.

Always pay your bills on time

One of the biggest factors that affect your credit score is your payment history. It constitutes 35% of your credit rating. If you want to effectively boost your score in the shortest amount of time, you can do by making sure that your bills are always paid on time. These bills include utility bills, mortgages, credit cards and more. Setting up automatic debit payments may help for some of your accounts.

Limit your credit applications

Every time you apply for credit, your lender injuries about your credit files. This inquiry is a hit on your credit rating. The more hits you have in a short span of time, the more suspicious credit agencies may become. Adjust your applications accordingly or use eligibility tools before applying.

Apply for a secured credit card

If you’re just building your credit score, applying for a secured credit card can help. This will help build your credit history. If you make sure that your payments are always online, that will help credit agencies to predict your behavior as consumer. Since you have bad credit, expect that the APR for these cards can be pretty steep. Repaying your bill in full each month is really imperative.

Keep credit card charges below 30% of your credit limit

One of the easiest tricks that always work when boosting your credit score fast is to keep your credit card spending at minimum. Ideally, you should keep your credit card charges before the credit limit. This way, credit agencies will see that you’re not overusing or overcharging your cards. This means that you’re in a good financial situation and lenders always see that as something positive.

Pay your debts

Aside from your payment history, another major factor that affects your credit rating is the amount of debt you owe. Whether it’s an auto loan, mortgage or a personal loan, the goal is to lower the total amount of debt you owe. Some financial experts suggest you use your savings if you have any, to reduce your debt. This is not always applicable for everyone however. If you do go this route, make sure you seek for financial expert advice if necessary. In any case, pay your debt as that can significantly improve your credit score.

23 Dec

Why Your Credit Rating is Important

Whether you like it or not, your credit rating plays a very important role in your financial life. Having a poor credit rating, for instance, can put you at a disadvantage. Conversely, a good credit rating offers a number of financial advantages you can enjoy. As a consumer, the goal is pretty obvious. Aim for a good credit score as it can do wonders for you financially.

To help you understand why your credit score is very important, here are reasons why you should care whether you have a good or bad credit score:

Your credit score determines the cost of future purchases.

When lenders and other financial institutions consider your application or purchases, they look at your credit score as basis for the pricing or rate they’ll charge you. To illustrate, let’s say you’re going to buy your first car and you’re applying for a car loan. If you have a good credit rating, the interest rate will be lower as opposed to a higher interest rate if you have a poor credit score. Obviously, you’d want to maintain a good credit score if you want to end up with the best rates and prices for your major purchases.

Your credit score can affect loan, mortgage, and mobile phone application approval.

If you have a bad credit score, it can also affect your loan and financial product applications. Depending on the risks you pose as borrower, chances are high that your lender may reject your application. For example, it will be harder to get approved for a traditional loan from major banks or high street lender. Even getting a mobile phone contract will be a struggle if your credit rating is less than stellar.

Maintaining a good credit score couldn’t be reiterated more. If you don’t want to struggle with your applications, there’s really just one way to do it. Be a responsible consumer, pay your bills on time and keep your credit score excellent. You shouldn’t have any problems if you can do it.

Your credit score takes time to improve.

In the same manner that it takes time to get a bad credit score, it will also take time to improve your poor credit rating. A few late payments on your credit cards, for example, can wreak havoc on your credit score. Defaults or CCJs are even harder to deal with. It is therefore very important to be very careful with your financial moves. One mistake can mess it all up for your credit rating. When it comes to your credit rating, the trick is to not take it lightly. Otherwise, you may end up dealing with a slew of consequences that can put a cramp on your finances for a long time.

Your credit score may influence where you can live.

If you don’t own your home yet but you’re just renting, your credit score may significantly affect where you can live or rent an apartment. Most landlords check your credit score when assessing your rental application. If you have a bad credit score, you’re putting your rental application at risk for rejection. It’s pretty self-explanatory. Landlords don’t want risks and a poor credit rating translates to high risks. To avoid complications with your rental applications, the better choice is to maintain an excellent credit score no matter.