If you know that you do not have a very good credit record, then you may worry that you will not be able to borrow money if you need it. This can make things quite tricky if you need money in an emergency or even if you want to borrow for a mortgage or something like this. You may even just like to have the peace of mind to know that you can borrow if you need or want to in the future.
Traditional Loans
You will find that traditional lenders will do a credit check and they will be looking to lend to those that they can trust to make the repayments. This means that if you credit record is not good, then there is a chance that you will not be able to borrow any money off them at all. However, you could also find that there will be some that will still lend to you. It is good to try to find out if there is a chance that you can borrow from them before you apply. If you get rejected by a lender then this will appear on your credit record and it will put off potential borrowers. Some may even see that you have been rejected and decide that they do not want to trust you or lend to you without even looking at your credit record in any more detail. Therefore, you need to try avoid this, which is why contacting the potential lender first and asking them whether they are likely to lend to you, could help. It is also worth bearing in mind that you may have to pay a higher interest rate if your credit report is not in such great order. You will find that it may not be possible to get the advertised rate and so this will mean that even if you think you will get a good rate from a lender you may not be able to get this once you apply to them. Therefore, you may need to ask the lender firs to check this with them.
No Credit Check Loans
There are some loans available for people who have a poor credit rating. Although they are called no credit check loans, a credit check does have to be done. However, these types of lenders will not pay much attention to your credit record as they do not look at your past credit history. They tend to just lend small amounts of money to anyone and if they pay those back successfully, they will lend them a little bit more. They build up trust this way so that they can lend to those that cannot get loans elsewhere. This means that if you need to borrow some money then you could use this option to help you. It is worth noting that these loans are dearer because the lenders are taking on more of a risk and you will have to therefore be prepared to pay more. You will also not be able to borrow as much and often you will find that you have to repay them very quickly. This can be good as you will not be in debt for so long but you need to make sure that you have the funds available to do that. You will often need to repay a lump sum and this means that you will need to know that you will be able to afford to do this and pay for everything else that you need as well, so you will need to plan it very carefully.