Should You Feel Optimistic Despite Having Very Low Credit Scores?

The reason for very poor scores is definitely poor handling of your funds. This is a vulnerable financial state which prevents you from exploring different opportunities. Should you give up at this stage and escape from the problem?

The answer is ‘no’ as not all hope has ended. Of course, it is concerning when your credit scores are beyond repair. However, you can still try to get your credit history back on track.

Recovery from this stage is a must as new obstacles might pop up with time. Some ways are there to draw up your return journey from a very poor credit history. You can start doing a side job to gather additional funding.

This shall help you meet some of the pending payouts. If the size of the debt is huge, you can get CCJ loans with no guarantor claim from a direct lender. Combining your earnings with loans can help in paying off the debts fast.

However, you should be in a condition to afford loan payments. Otherwise, this attempt will end in vain. Check if the rates are bearable for you so that repaying can be smooth.

To know more about how you can handle very low credit scores, stay here.

How can you be optimistic with very poor scores?

These scores are very concerning. It reflects your irresponsible financial behaviour. You should have been alert the moment your credit history shows a bad sign.

You must have stayed from taking up further debts when your credit scores are in a miserable state. Preventing this situation is possible if you prevent opting for unaffordable loan offers. However, you can still expect some assistance from direct lenders.

Find out how you can handle your very poor scores.

1.  Get ready with a guarantor

Your credit history is not showing any signs of improvement. This could be a big setback in your financial profile. The loan provider always looks forward to getting repayment assurance.

With poor credit scores, your affordability can establish your financial stability. However, when your credit scores become very low, you do not have the affordability to affirm the lender. In that scenario, getting easy loans from a direct lender in the UK becomes tough.

This is because the lender cannot imagine getting back loans on time. To boost your chances of getting loans, you must get ready to provide a guarantor. That person should have stellar credit scores and a steady income.

Moreover, they must agree to support your loan payments. This means they must give consent to pay back loans on your behalf. Then, the lender will have the assurance to go ahead with loan approval.

It might seem like an easy task. However, as it is going to be a huge responsibility for the guarantor, finding the right fit is quite difficult.

2.  Pledge collateral if not a guarantor

If you think, you cannot arrange a guarantor. This is because none is willing to take up this huge responsibility. In that case, you can consider a second option.

You can utilize your assets to fetch you this borrowing opportunity. Produce them as a security against the loan amount. This also acts like an assurance for loan repayment.

The loan provider can use your assets to recover the loan amount and interest if you cannot repay on time. You will lose the asset forever in the case of defaults.

Therefore, if you are ready to take up the risk, you can think of this option. Otherwise, you can check out the next option always.

3.  Accept pricey rates of interest

Your credit scores cannot qualify for competitive rates. Thus, you should be prepared to accept high rates of interest. However, you can expect some relaxation from direct lenders.

They set the loan price based on practical factors. The rate of interest is not going to be too high as it may happen with other traditional lenders. These lenders offer you a facility to fetch a free proposal.

This helps you to peek into the rates and terms. You can avail of this facility despite very poor credit scores. Make sure that you have fulfilled all the necessary conditions concerning eligibility.

At times, the lender might ask you to provide a deposit to compensate for the risk. If you have savings that you can utilize right now, you must give this a try. It acts like an advance based on which you can get a larger amount of loan.

What are the ways you can make the most out of these loans?

When you get a loan from a direct lender, you can expect a bunch of features as benefits. As a borrower, you must verify whether you must take the plunge despite lacking perfect credit scores. These attributes can help you make a sound decision.

1.  No strict repayment condition

The lender is aware of your stigma and they do not intend to increase it. For this reason, they curate a repayment structure that allows flexible loan payments. They do not demand you to pay back the loan amount in full and at one time.

You can portion out the overall amount that includes the interest rates as well. This way, you can pay a small amount for a few months. The size of the amount will depend on the duration you get for loan repayment.

Adjust your budget so that you can save extra to pay loans on time. Stay away from spending money on splurges. This is a tough time and you must concentrate on priorities.

2.  Application via the online mode

The lender is ready to offer help despite your setback. It does not indicate that the lender will complicate the application process. Rather, they keep it short and simple with easy steps.

You do not have to go out of the way to submit a loan application to the bank branch. The form is now available online and you can fill it out at any time.

The bottom line

Rejections because of very low scores should not prevent you from trying further. You must keep searching as direct lenders are ready to make things easier for you.