If you’re looking to borrow, bad credit can be a problem. However, even if you don’t have a perfect credit score, you still have options. Roughly 30% of people fall into the territory of having a “bad” credit score i.e. one that sits at the bottom of the levels defined by credit references agencies. However, it’s widely recognised that even someone who falls into this category may still have borrowing needs. And, as sensible borrowing can actually help to mend a broken score, credit is something that could benefit anyone, even those on the lower end of the spectrum. What counts as a bad credit rating? It depends very much on the agency doing the rating – and not all of them are that straightforward about the numbers that would give you a bad credit score. However, if your credit score sits at the lower end of the scale then you’re firmly within this category. There could be any number of reasons for ending up with poor credit. It might be something as obvious as defaulti
Personal Contract Plan (PCP) car finance deals are one of the most popular ways to buy a new car. In fact, 86% of new car buyers are currently using PCPs in order to finance the purchase of a new vehicle. However, recent changes in the values of new cars and used cars have made PCPs more expensive and meant that those who have already a PCP contract may not find it that simple to get a great deal next time around. What is a PCP car deal? It’s a very simple way to buy a car if you don’t have enough cash in the bank to make an outright cash purchase. Instead, you’ll pay a deposit for the car – often matched by a contribution from the dealer – and then take out a loan for three or four years that covers the rest of the sale price of the car. Regular monthly repayments are made over the period of the loan and these cover the gap between the new price of the car and the expected value of the car when the PCP comes to an end. When the PCP finishes then there are three options: han
There are many ways to borrow these days and if you don’t have the perfect credit score then that doesn’t necessarily need to be an obstacle. Guarantor loans are one example of a bad credit loan i.e. borrowing even if your credit score is poor. If you apply for a guarantor loan then you are effectively giving the lender the reassurance of having someone else who will “guarantee” that the loan is repaid according to the terms of the credit agreement. But what is a guarantor and who can be one? What is a guarantor? A guarantor is a third party who agrees to meet the obligations you’re agreeing to if you’re not able to do so. The system of using a guarantor when it comes to financial obligations is an old one and actually pre-dates the credit scoring lenders use today to make decisions. It means that if you look like you might be a credit risk – for example, you have a low credit score – there is another option. Instead of being rejected completely for credit, you could b
If you’ve applied for credit and been unexpectedly rejected then this may have something to do with your credit rating. A credit rating is basically an overview of the way that you have managed your money and credit in the past. It is data that is made available to lenders by credit reference agencies that will reveal information such as how much you’re borrowing, how well you’ve made repayments and how often you’re applying for credit. Lenders use their own rules to turn this credit rating data into a credit score, and then use the score as a means to decide whether to lend or not. A poor credit rating may not seem like the end of the world but it can have an impact in many ways. For example: Rejection of credit card loans and applications Only being offered high interest credit Higher insurance premiums Being unable to take out a mobile phone contract Difficulty getting a car loan Being denied business start-up finance What causes a bad credit rating? There is no single cred
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Open Banking has been causing ripples, both across the fintech sector and in the news. Back in 2016, the Competition and Markets Authority (CMA) issued a ruling that requires the nine largest banks in the country to allow licensed startups direct access to their data. And with that the first step towards Open Banking was taken. The decision was a response to the dominance of established banking institutions in the UK Barclays, HSBC, Lloyds, Santander and Royal Bank of Scotland currently hold 80% of the market. The CMA believes that opening up this data to other companies, especially those looking to innovate in personal finance, will result in better deals for consumers. Why is Open Banking happening? Investigation by the CMA found that there was too little competition in the UK banking market. Those same big five banks dominate, each offering fairly similar products at much the same rates with little variation through which consumers could find better deals. We have stagnated as bank
Blue Monday falls on the third Monday of January, just inside the start of the New Year but far enough from Christmas for the glitter to have faded. This is (apparently) the most miserable day of the entire year when we all realise we are failing at our resolutions and summer is nowhere to be seen. But what is it about this particular Monday that makes it such a depressing day? The Blue Monday formula Blue Monday was actually conceived by a PR company so the scientific basis for its existence is sketchy. However, there is some sense behind the idea that the first day back to work after the weekend in one of the greyest, coldest months of the year could make all of us want to take a duvet day. The various factors involved in calculating the “Blue Monday formula” are: The weather – often grey, windy, stormy, cold and generally not much fun to leave the house in Debt – according to comparison service uSwitch 9 out of 10 people end up with a debt hangover after Christmas. It’s o