Sometimes loans are necessary. You can never guess when the washing machine is going to break down, or when the car is going to need a new clutch. So what can you do when a large expense falls on your doormat other than a loan? The simple answer is that there isn’t a huge amount you can do that will get you the money you need quickly, hence why loans are sometimes a necessary entity. However, those with bad credit can struggle to obtain a loan, therefore spiraling them further into debt. There are many ways that you can do this such as searching creditful.com for loans with bad credit. While this is the most straightforward way of getting yourself a loan when you need one, we’re going to show you other ways that you can solve your dilemma.
Look at your credit score
The thought of looking at your credit report can be daunting. There may be numbers and figures that you don’t understand and above all else, it may seem pointless to look at a score that tells you what you already know - you’ve not been careful with spending and need to make changes.
It’s important to remember that sometimes the reason you have a poor credit report is because lenders can’t see whether you’re trustworthy with money or not. So even those who haven’t necessarily been debt may still struggle to obtain a loan because they have no financial history for lenders to check.
However, checking your credit score through free sites like Clearscore will help you understand where you’re going wrong and give you advice on how you can improve your credit score. You may find that there are steps you can take straight away that will immediately improve your score. Things like ensuring you’re registered to vote will help lenders keep track of you and you can begin building a healthier financial footprint.
Making a habit of checking your credit score can also help your financial habits. Checking once every few months to see how your score has differed and prompt you to make further changes.
Ask your family and friends
While it may be embarrassing and a difficult conversation to have, obtaining a loan from a family member or friend brings many benefits:
- You can agree on the most comfortable way of paying your loan back between yourselves.
- Your loan won’t accrue interest.
- You don’t have to risk worsening your credit score by taking out a loan or credit card.
Of course, there are downsides to lending money from family and friends, especially if you don’t keep to your side of the agreement. If you do choose this option, make sure that you’re 100% certain you’re able to repay the money you’ve borrowed or you could risk damaging relationships as well as your financial situation.
Reduce your expenditure
Reducing your expenditure will free up money instantly to help build the money you need. However, reducing your outgoings, paying bills on time, and generally being more conscious of the way you spend your money will affect your credit score. As soon as lenders can see you’re making positive changes with your spending, you’ll be more likely to be accepted for a loan when you need one.
You can reduce your outgoings by getting rid of unnecessary subscriptions or canceling accounts you don’t need or use such as a gym membership or Netflix. Check out this guide for more ideas on how to reduce your expenditure - you’ll be surprised at how much you could be saving!
Get a co-signer
Even if you’ve applied for a loan already and been declined, all is not lost. Much like when applying for a privately rented property, having a co-signer or ‘guarantor’ to agree to take the fall if you don’t make payments will dramatically increase your chances of being approved for a loan. Again, remember that doing this could damage your relationship if you don’t keep up with repayments. A co-signer will often be required to earn over a certain amount each year and have a good credit score themselves, so be sure to keep that in mind when asking someone to co-sign for you.
As you can see, there are many ways that you can get the money you need, even with bad credit. To avoid this dilemma in the future, try to cut out bad spending habits and continue to use your credit report as a reference so that you don’t fall into this situation again.