How You Can Prosper with a Bad Credit Bridge Loan
How You Can Prosper with a Bad Credit Loan
Are you struggling with bad credit but need a way to finance something? Have no fear! Click here to learn about bridge finance and how a bad credit loan can help you succeed.
Did you know that 60% of the UK population has a credit card? And that about 96% of the population has a debit card?
This means that you most likely have either one, or both.
This goes to show how the British are now more confident of their spending.
On the other hand, it also raises the issue of poor credit. And why bad credit loan programs continue to become more popular.
With poor credit affecting so many aspects of a consumer's life, it can be quite devastating to find yourself in such a financial pinch. We're here to help out though. We'll show you how bad credit bridge loans can help you and your business.
So, make sure you read this useful post from start to finish!
What's a Credit Score in the First Place?
To fully understand how bad credit bridge financing can help you prosper, it pays to understand what a credit score is in the first place. First, let's take a look at the average Experian score In the United Kingdom.
Experian is one of the several credit agencies used not just in the UK, but also in the US. The credit score the company gives you shows your creditworthiness. It also indicates how likely you are to pay back your debts.
In the UK, the average Experian score is 757. The city boasting of the highest score is Edinburgh, at 807. London and Bristol follow next, at 780. Cardiff is at 737 and following closely at 735 is Glasgow and Leeds.
But what do all these numbers really mean for you, as a consumer? The highest Experian score you can get is 999. The closer you are to this number, the lower risk you are in the eyes of lending institutions.
In other words, the more favorable you are to them. This means you have higher chances of securing a loan. These include credit cards, mortgages, as well as other loans, including those for personal, car, and business use.
The Concerning Truth about Bad Credit and How It Affects Your Loan Approval Rate
Now that you know more about credit scores, what makes one fall under the "bad" category? Knowing how Experian categorizes scores can help you better understand this.
- 961 to 999 (Excellent) often means getting access to the best financing services
- 881 to 960 (Good) means a high possibility of securing most types of financing services
- 721 to 880 (Fair) can get you that loan with a fair interest rate, but the loan limit itself may not be that high
- 561 to 720 (Poor) can still mean acceptance for loans, but they often already come with higher interest rates
- 0 to 560 (Very Poor) has the highest likelihood of loan rejection or denial
As you can see, not one of the cities we mentioned has an average Experian score reaching Excellent or Good. Most of them only have Fair scores. This is one of the primary reasons behind one of three people in the UK, unfortunately, being denied a loan application.
Always remember that every time you apply for credit (whether a card or a loan), the lender you apply with looks at your recorded credit file. If you have a poor credit score, the company will consider this a red flag and think you won't be able to pay back your debt. As such, they most likely will reject your application.
But there's more. All denied loan applications show up on a credit file. And this is another factor lenders consider.
When they see other lending institutions have rejected you, they will question this. And in most cases, they'll assume that you are a high-risk borrower who may not be able to pay them back their money. They may still issue you a loan but at a much higher interest rate.
Worse, they may just deny the application right there and then. And the vicious cycle never ends. The worst part is, the more rejected applications you have, the more difficult you can get credit again.
Where a Bad Credit Loan Comes into Play
It isn't just tiring to always receive a denial. It also puts your finances at much greater risk.
Your bad credit score may even be the only reason you can't grow your business. Your past mistakes continue to haunt you, even though you can comfortably pay back potential loans now.
This is where you should already consider a bad credit loan. It's one of the effective strategies that can help you put a stop to the vicious cycle of rejections. Best of all, you won't need to wait for days, even weeks to know whether you qualify or not.
Some of the most reputable bridge loan lenders offer a same day decision. So long as you complete all requirements, you just need to wait for 24 hours to know the lender's decision. And because these financing programs specifically cater to those with bad credit, you've higher chances of finally securing a loan.
The Bridge to a Better Credit Score
There's more to bad credit bridge loans than just finally freeing you from rejections. They can also actually help you boost your credit score!
That's because one of the best ways to show your creditworthiness is to prove that you can pay your debts on time. Without a credit or a loan, you have very little evidence to show lending institutions.
Since a bad credit loan gives you a high chance of approval, it's a key step to finally having proof that you indeed have more stable finances now. That you have learned and recovered from your previous mistakes, and you now are a more responsible borrower.
So long as you pay your loan on time, then you can gradually increase your credit score. Even just one point from 560 to 561 can change your very poor score to a poor one. And a point increase from 720 to 721 already classifies your score as a fair one.
Stop the Vicious Cycle Now
Put a stop to all those frustrating, even devastating feelings brought about by loan rejections. A bad credit loan may be all you need to finally grow your business and launch that expansion.
Apply for a bad credit loan now, so you can start bridging that gap to a better credit score.