What is a credit rating or score?
Your credit score is a rating given to you that determine how likely it is that you will be able to afford to repay any credit you borrow. Lenders usually carry out a credit search to find out your rating and they use this, plus any information you have given them when you apply for a loan to help them decide if it’s likely that you will be able to make repayments.
The higher your credit score, the more likely it is that lenders will give you credit. Your score will determine whether you get credit in the first place and at what rate of interest a lender charges you. Lenders have their own scoring criteria, so while you might end up getting refused by one company, another might accept your application. At creditpoor.co.uk, we don’t do credit checks, however, we have certain criteria which must be met for us to be able to lend responsibly.
What factors affect your credit score?
Your credit score can change throughout your life, depending on whether you apply for credit and whether you pay it back timely. Your score will be affected by the types of credit you use and the amount of personal debt you have, whether you have made payments on time and any county court judgements made against you to recover debt. Remember that applying for a lot of credit in a short space of time may also affect your score. We can offer you a solution if you have a poor credit rating, visit creditpoor.co.uk for more information.
Can a payday loan improve my credit score?
Many people think that having no credit is better than having a history of borrowing. This is not true. If you have no credit history, lenders will have less information to base their decisions on if you go to apply for a loan. Many lenders will advise you to take out a credit card or loan initially, so that you can borrow a small affordable amount and kick-start your credit history.
Applying for a payday loan can have a positive effect on your credit score, if you pay it back on time and in full. Late payments and missed payments can negatively affect your credit score, not to mention put you in more debt. With Credit Poor’s same day loans, we use your information to give you the most affordable deal for you, to minimize the risk of you being in a situation where you can’t afford to make repayments.
Be aware that every lender has a different credit scoring system, however, and while some lenders will accept your application with a history of borrowing from payday lenders and others will find it undesirable, it varies widely.
To improve your credit score, get a credit report and get an update regularly to make sure lenders have the correct information about you, don’t miss payments and close any credit accounts you don’t use.
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