Having a poor credit rating is the bane of many people’s lives. Even those whose financial situations have improved leaving them in a better position make repayments can still suffer from poor credit, and paying all of your debts off doesn’t necessarily mean that your credit rating will improve, as it can take years for defaults and missed payments to be removed from your credit file. If you are in need of money quickly for whatever reason and your only option is borrowing, having a bad credit rating can often hinder you. However, there are some options for those with poor credit – we’ve listed them below.
Short Term Loans
Although it is not advisable to use payday and short term loans as long term credit solutions or borrow more than you can afford, they can be extremely handy for covering emergency expenses, especially if you have poor credit and need some extra cash immediately. Many short term lenders are happy to lend to those with poor credit depending on the amount of money that you wish to borrow, and some will not even have you undergo a credit check, meaning that it has no impact on your credit file. Same day loans are a handy way of obtaining quick money, however since your credit rating is already poor you should be extremely careful and only borrow an amount that you are certain you can pay back, to ensure that you don’t cause any further damage to your credit rating. Making a repayment on time could even improve your credit rating.
If you need more money than a short term loan can offer or are wanting to pay it back over a longer period of time, credit unions are an excellent option for those with a poor or bad credit rating. Run in a similar way to banks, a credit union is a non-profit organisation which is run by its members who will usually all have something in common such as the industry in which they work or the area in which they live. Most credit unions are more lenient when it comes to lending money to those with poor credit, making it a more likely option than a bank or other conventional lender if your credit score is low. If you have a local credit union, it might be a good idea to give them a call and explain your situation in order to discuss the options that are available to you.
Credit Cards for Poor Credit
Although it might take a while for a credit card to arrive, if you have an expense that can wait a while to be paid or are expecting a future expense that you’re not sure how you are going to pay, taking out a credit card designed specifically for those with a poor credit rating is a great way of having some emergency cash available, and can also help you to improve your credit rating in the meantime. If you do apply for a credit card for poor credit, it’s important that you ensure you will be able to meet the minimum monthly repayments, especially if you still have other lines of credit that need to be repaid. It’s advisable for those with bad credit to only use their credit card in the event of an emergency, or make one or two small purchases on it each month and repay it on time in order to rebuild a credit rating.
If you don’t want to undergo a credit check or borrow money from a bank or other lending organisation, it may be worth speaking to your employer about having an advance on your wage which will be taken straight out of your pay check. Many employers will offer this to any employees who have found themselves in an emergency financial situation, however you will be expected to explain your situation to the HR department and meet certain criteria. If you are able to obtain an advance from your employer on your next month’s wage, this works in a very similar way to a payday loan, however the best thing is that you will not usually be expected to pay any interest or charges for the service, and you are unlikely to need to undergo a credit check.