Bad credit UK

If we look at what the papers say about bad UK credit we can be forgiven for thinking that it's all doom and gloom - banks needing bailouts, millions unemployed and well known high street stores going bump. However, it's not all bad, and some companies are even having a boom time during the recession.

Take discount stores, for example. A recent report in 'The Grocer' states that independent discount stores are making record profits as revealed by the latest ranking of the UK's 50 biggest independent retail chains. Shrewd property investors are also seeing the credit crunch as an opportunity, by grabbing properties at knock-down prices, in anticipation of future gains when there is an upturn in the economy. Others are investing in gold as they see it as a more stable commodity.

The credit industry, which includes credit reference agencies and debt management companies, is another growth area. A part of the credit industry is loan companies and, while some are tightening up on credit, other companies are more willing to grant credit to people with a bad credit history. If you are struggling to obtain credit, this is good news.

Many people have found themselves in debt through no fault of their own, because they have come out of work or have been faced with increasing mortgage payments. Unfortunately, once you get into a default situation, it can be more difficult to obtain credit in the future as any defaults in payment are reported to the credit reference agencies who keep records of your credit status.

However, many companies are now willing to lend to people in this situation, and if you can obtain credit and maintain a good payment record, it could improve your credit status. It is possible to obtain the following methods of finance if you have a bad credit rating, without always having to have a credit check:

Secured Loans
With this type of loan your home or another item of value is used as collateral against the loan so that the lender can repossess the item if you default on the loan.

Unsecured Loans
These have a higher rate of interest than secured loans, but you do not have to provide any collateral.

Payday Loans
This is an instant access, short term loan, which has to be repaid as soon as you receive your next salary. You need to provide proof of income, and a post dated cheque or your bank details, so that the lender can have the value of the loan plus interest transferred to him on your next pay day.

Credit cards
There are various credit cards on offer to people with a bad credit history, including secured credit cards, high-interest credit cards, and credit cards with a guarantor.

By obtaining credit through one of these sources, even if only as a temporary measure, you could rebuild your credit record so that you will be able to obtain credit more easily in the future.