It is often difficult to obtain a loan when you have a bad credit history, especially when you’re applying for a home loan. But it doesn’t have to be the end of the world because you can easily take some steps to get yourself in a better position.
Most of the time this will mean trying to tidy up your credit file and getting rid of any adverse reports. Your credit file will contain a history of every application you have made for credit during the last 5 years. It will also contain a record of any loans which have been in default, in other words when you have not made repayments on time. It will also have a record of any court judgements or bankruptcy actions which have been taken.
In the majority of cases, if you have some credit defaults which have been paid or court judgements which have been satisfied, the records will drop off your file within a five-year period.
In some extraordinary circumstances however it might be possible to have these defaults erased from your credit file in advance of the statutory 5 years.
The only way you can do this is to consult with a specialist in the area, usually a solicitor, who can assist you in having your credit file updated.
Sometimes, if the defaults are many years old and you have had a clean history for at least 2 years, there may be some lenders who are willing to help you.
During the global financial crisis most of these alternative lenders, often called non-conforming lenders, disappeared from the market. Over the past year however many have been re-entering the market and are now open for business again.
It depends on how much money you are looking for too.
As far as home loans go you will need to have saved a substantial deposit before you will qualify for a bad credit home loan. As a general rule you will need at least 10% or mre, depending on your credit history.
For other people who are simply looking for a short-term funding arrangement, there are many payday lenders who are willing to advance funds under special circumstances. Private lenders such as these have stringent criteria but it is easy to test your eligibility by filling out an online application form.
You need to be careful however because many of these lenders have high rates of interest and you could find yourself in a spiral if you are not able to make the repayments on time. Make sure you check all the conditions before you enter into an arrangement and ask plenty of questions so you are absolutely clear.
The first step when applying for a loan with a private lender is to fill in an online application, making sure you complete the answers truthfully and completely. You will usually get an answer back within 24 hours so you will not be left hanging too long.
Private money lenders for bad credit loans offer short-term solutions, so it might be a good idea to talk to a mortgage broker about your range of options first.

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