How do you go about getting a loan when you've got a history of bad credit? Many banks and loan providers will want to see detailed a credit history before agreeing to give you a loan, but some people may have a history of bad credit - often due to reasons beyond their control. Missing the odd bill payment, a minor overspend, illness, redundancies or a breakdown of a relationship can all lead to times of financial difficulty which can adversely affect your credit rating.


This will make it more difficult to gain a loan in the future. Many high street banks will refuse to loan money to people with bad credit, making it difficult for people to get out of debt. You may be in the process of paying back a loan with a high interest rate, but perhaps it would be cheaper to take out a new loan with a lower interest rate, pay off the existing loan straight away and then begin to repay the new lower interest loan on a monthly basis - saving on the total amount of money that you have to pay back in total. But if you already have a history of bad credit, how do you get that new, lower interest rate loan?

Well, it is possible to improve a bad credit history - although it may take several months or even years to do so. First you will need to obtain your credit report. It is important to check the accuracy of the report as occasionally mistakes can be made. Sometimes it may even help to send a letter to the credit agency, which can be included in the report that explains reasons for a particular credit problem, for example redundancy or illness. You'll also need to plan out your finances better. Many people have a poor credit rating, not because they can't afford to live the lifestyle that they do, but because they are disorganised when it comes to paying their bills - and repeated late payments will definitely lead to a bad credit rating.

Therefore, to prevent forgetfulness, set up direct debits to pay your monthly bills. This will not only help to improve your credit rating but can also be cheaper, as many companies offer a slight discount for those that pay via direct debit.

However, the large number of bad credit loan providers all competing for your business means that there is plenty of choice, making it almost always possible to find a loan, no matter how bad your credit rating may be.