Once missed and late payments are reported to credit reference agencies, it is usually necessary to turn to bad credit financing. Whilst this may seem relatively straight-forward, finding a financial institution that is prepared to offer bad credit credit cards, basic bank accounts and/or no credit check loans can prove difficult. Financial products that are suitable to assist those with poor credit scores not only provide a financial lifeline, but a chance to repair bad credit. The problem is that borrowing money isn't cheap due to the risk of default faced by the lender.
Bad Credit Financing - Pawn Shop Loans and Same Day Payday Loans
- Same day payday loans. It is possible to take out a no credit check loan for up to £1,000. The cost of borrowing is typically £20 to £25 for every £100 borrowed. It is expected that the applicant has a full-time job, has photo ID and is a UK or U.S. citizen. The borrowing term is one calendar month, but a same day payday loan provides a way of dealing with a short-term financial emergency.
- Pawn shop loans. Borrow in excess of £10,000 based on the provision of suitable collateral, such as gold or jewellery. The term is typically 6 months and the APR can vary significantly. The provision of collateral when borrowing money means that poor credit scores are not a problem. If the loan is not redeemed, the item will be sold to recover any money that was lent.
Bad Credit Credit Cards for Poor Credit Scores
A credit card for poor credit is available on an unsecured or secured basis for those who don't qualify for mainstream financial products. A bad credit credit card provides a way of recovering from a poor credit score. Making reliable repayments now and in the future will be reported to credit reference agencies which means that the borrower may qualify for low interest cards in the near future.
Basic Bank Account
The UK government introduced the basic bank account to prevent financial exclusion. A bank is legally obligated to provide bad credit financing and banking facilities for all customers. All accounts come with a cash point/ATM card and some even offer a Maestro, Solo or Visa Electron card. However, most banks specify a minimum for counter transactions and there is no overdraft available.
Bad Credit Credit Cards, Basic Bank Accounts and No Credit Check Loans
Bad credit financing is more difficult, but it isn't an insurmountable obstacle. Although the terms won't be as favourable due to the borrower's unreliable repayment history, it is still possible to get poor credit history credit card, basic bank account, same day payday loan or a pawn shop loan - often with no credit check necessary.
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