So how can you go about getting out of the credit Catch 22 if you have adverse credit? Few credit-card providers are willing to take 'risks' with adverse credit history consumers applying for their products - and some of those that do then want to charge the people who can least afford it the highest rate of interest.
Fortunately for those who face such a prospect, there are some financial institutions prepared to consider taking on adverse credit history customers. But be absolutely upfront with them about your past problems to avoid wasting time.
There are also UK financial products sometimes referred to as a second mortgage or a second charge and, in the event of your defaulting on the loan, the lenders are repaid only after your original mortgage has been repaid to the lender, who has first-charge rights. This arrangement gives the lender increased security over a personal loan and often, a better interest rate can be achieved.
If you are already a homeowner with poor credit history, you can get a homeowner loan, which differs from a personal loan as it is secured against your property in the same way as your mortgage. You can use it for any purpose, such as buying a car or a holiday.
Many adverse credit companies will also provide car finance and a new car to those who have a bad credit rating. All they care about is your ability to pay the loan and because they cut out the middle man, you can find preferential rates.
If you have a poor credit history but also a homeowner, don't despair. The fact that you own your home means you may be able to apply for an adverse credit secured loan.
As it is a high risk for the lender they will charge you higher rates of interest. So with a bad credit history, you will be unlikely to get an adverse credit loan with very cheap rate of interest.
There are firms who specialize in Adverse Credit loans for people who have no option but to take out adverse credit secured loans.
Be careful of adverse credit secured loans that seem too good to be true, as they might be just that. You will want to find a secured loan with the lowest rate of interest that stays cheap for the life of the repayments.
Some companies offer special incentives, gifts or extra low interest rates at the start of the adverse credit secured loan to get you signed up. Beware. You need a secured loan with the best rate interest that stays low until you have repaid the loan.
Don't forget that research is the key to finding the best adverse credit loans for you. There are plenty of adverse credit loan lenders out there so consider all sources, including online which offers great rates due to the nature of the competitiveness of the UK personal finance market.
