If you have a bad credit rating, defaults or CCJs (County Court Judgements) registered against you, you will probably find it very hard to get a personal loan or credit card if you can find a lender that is willing to loan you money they will almost certainly charge you higher rates of interest than if you had a good credit rating. If you are a homeowner and have a bad credit rating, an experienced advisor believes that a secured loan may be the solution to unlocking more affordable rates and actually getting the money you need.
Salford, Lancashire -- (SBWIRE) -- 07/19/2013 -- Contrary to popular belief, there is no such thing as a credit blacklist, every lender scores their potential customers differently and some lenders have more strict lending criteria than others do. In the UK, there are three main credit rating agencies. Of these agencies, Experian is probably the biggest and most well-known.
The credit rating agencies collate data from various sources such as the court system, the electoral roll, banks and other financial institutions. Every time you borrow money or apply for any form of credit these agencies are notified. The agencies are also told how you service debts that are in your name, the agencies know the balance that you owe, if you make payments on time and whether you default (don’t meet your obligations under the credit agreement), etc. All the information collated about your financial behaviour is used to build up a picture of you and your creditworthiness – this picture is called your ‘Credit Rating’.
Using the information that they obtain from the credit rating agencies banks can determine whether you are a good or bad credit risk and whether it will be profitable for them to loan you money or not. If they are not going to get their money back it will obviously not be profitable for the lender to give you a loan, credit card, etc. and they will either refuse your application or charge you a higher rate to compensate for the risk. With a secured loan, the lender takes what is known as a charge on your property.
A secured loan is less risky for the lender because if you do not pay they are guaranteed to get their principal back once the house is sold or by repossession. It’s important that anyone obtaining a secured loan ensures they can meet the repayments; thanks to the lower risk involved lenders are more comfortable lending to homeowners with bad credit and usually offer them better rates than they would offer unsecured borrowers.
About Baker Financial
Baker Financial specialise in helping clients with bad credit to obtain secured loans http://www.bakerfinancial.co.uk/bad-credit-secured-loans.html. The company say that their clients use secured finance for various purposes including debt consolidation, home improvements, credit repair etc. Baker Financial says that they have helped many clients who have suffered previous adverse credit to obtain affordable credit.