Your Credit Rating - Foot Faults and Defaults
If you've ever followed a sporting competition (Wimbledon, for example), you'll have noticed that at the start the players are "seeded" on their past performance. This means that they don't have to play in the early stages or that they are put in separate knockout groups. It's a way of making sure the "best" players (the ones who bring in the biggest crowds) don't knock each other out in the early stages. In other words, it's a kind of insurance for event organisers. In the same way, lenders need to judge how likely a borrower is to default, but all they have to go on is past performance.
What does this have to do with bad credit ratings?
Well, your credit rating (sometimes called a credit history or a credit score) is a way of seeding people so that the so-called "good" borrowers are fast-tracked to credit. Missing credit card repayments, defaulting on other financial agreements or being made bankrupt all add points to your score.
Because everyone misses payments every so often, people are graded. A bad credit rating is given to someone who has either had one big detrimental credit event or lots of little ones.
Should I get rid of my bad rating?
It's a good idea, but life goes on, even with a bad credit loan rating. Just like a no-claims bonus in insurance, good financial behaviour over a sustained period can improve your score. Lenders realise that there is always a risk (just as no. 1 seeds sometimes get knocked out early), so they always have to balance the chance of non-payment with the benefits of having a new customer.
There are companies that specialise in finding secured loans quotes and financing those with a bad credit loan rating, so if you need the money urgently, you should never give up hope.
We can find a loan for you.
