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Representative Example: Borrowing £4,500 over 36 months. Repaying £219.55 per month. Total repayable £7,903.80. Annual interest rate is 49.9% (variable).

Bad Credit Loans

For all intents and purposes, ‘bad credit loans’ don’t actually exist, the term, ‘bad credit’ is bandied about a lot; the main reason being is that it is generally used to describe an individual who has a less than perfect credit score.

Loans are not broken down into descriptions such as ‘bad credit loans’ or ‘good credit loans’, an individual’s ability to obtain a loan is dependent on what’s known as a ‘credit score’ or ‘credit rating’.

Each credit reference agency will have a different method in which they rate a person’s credit score. However, that credit score will provide a lender or creditor with a specific idea of that individual’s current position when it comes to borrowing.

Brokers and lenders may market the term ‘bad credit loans’ to certain individuals who have a less than perfect credit rating. However, brokers and lenders generally offer a wide range of products which cover people of all different types of credit standing.

How can I improve my credit?

At one point or another, many people have found themselves in a position where their credit rating has been affected in a detrimental manner. There are a few steps you can take to try and make some headway towards improving your credit score.

1. Obtain copies of your credit file

There are three major credit reference agencies in the UK. They are Experian, Equifax and Callcredit, each one is obligated to provide you with a copy of your credit report.

It would be advisable to obtain a report from each of them and review them separately very carefully; there could be mistakes on there that could be affecting your credit score and can be remedied.

If you find errors, you will need to notify each of the credit reference agencies directly, informing them of where you believe mistakes have been made. The agencies will have 28 days to review the information and then decide to either remove the information or state why they believe the information they hold is correct.

Also, if in the past you accumulated a debt whilst you were out of employment, but are now back in employment, you can add a ‘notice of correction’ to your credit file, all lenders will be able to see this.

2. Ensure your payments are up to date

This is probably the most effective method of improving your credit rating. Always check that the payments of the credit accounts you hold are always up to date and made on time. Missing payment and making late payments may have a negative impact on your credit score.

If your payments are always made on time, it makes you look more credit worthy to potential lenders!

3. Get on the Electoral Roll

When a lender is looking at your credit file to get an indication of your credit worthiness, one of the checks they will make is to see if you are on the electoral register. They need to confirm you are who you say you are, they check the electoral roll to corroborate your name and address and remove any doubt of fraudulent activity.

If you are not on the electoral register, the lender may become sceptical about your identity and ultimately reluctant to release any funding.

To register yourself on the electoral roll, head over to and complete the relevant section.


1. What is a bad credit loan?

First and foremost, theoretically, ‘bad credit loans’ don’t exist, an individual’s ability to obtain credit is generally based on their credit rating.

If an individual has had credit problems in the past, any loan offered may carry a higher rate of interest, this is known as ‘rate for risk’, the higher the credit risk; a higher rate of interest may be applied to the loan.

2. Will having bad credit affect my ability to borrow?

This is probably the most common cause for concern for people with bad credit, as a broker, ‘Unsecured Loans for You’ has an extensive panel of lenders. Whilst we can’t offer any assurance that you will be accepted for a loan, plenty of lenders will consider individuals who have less than perfect credit.

3. How is my credit score calculated?

Different lenders will use different credit reference agencies when looking at each application. Each credit reference agency will use their own unique systems when calculating an individual’s credit score.

For information on how Experian work, this blog post from their site explains it all in full detail:

Similarly, if you head over to the Equifax website, there is more information on how they operate:

Also, to gain more knowledge of how Callcredit use your information to calculate your credit score, check out this page form their website:

4. If I obtain a loan, will it improve my credit rating?

Taking out a loan isn’t going to improve your credit rating overnight; it will depend on your ability to repay the loan and that you ensure it is paid on time on the requested date each month until the loan is repaid in full.

If you manage to accomplish prompt payments, then you could see a positive impact on your overall credit score.

Loans up to £25,000

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49.9% APR representative (unsecured)

Representative Example:
Borrowing £4,500 over 36 months. Repaying £219.55 per month. Total repayable £7,903.80. Annual interest rate is 49.9% (variable).


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*Unsecured loans are available to a maximum of £25,000. Loans of up to £100,000 may be offered by the lenders subject to affordability. Typical Example for illustration purposes only: £25,000 over 10 years with 7.8% APR, Total to repay: £35,664, Monthly Repayment: £297.20. Overall cost for comparison is 5.5% APR typical. Overall cost for comparison for unsecured loans is 22.1% APR typical. Unsecured Loan Typical Example for illustration purposes only: Borrowing £4,500 over 36 months. Repaying £219.55 per month. Total repayable £7,903.80. Annual interest rate is 49.9% (variable).



The Money Advice Service

Copyright ©, which is a trading style of Unsecured Loans For You Ltd. Hyde Park House, Cartwright Street, Hyde, Cheshire, SK14 4EH. Registered in England. Company Reg No: 7769033. Data Protection Act Registration No: Z2884329, FCA Authorisation Reference Number: 723179.

Unsecured Loans For You Ltd are a licenced credit broker, not a lender. We are authorised and regulated by the Financial Conduct Authority. The information you provide is passed to our trusted panel of lenders where all applications are subject to assessment and approval.

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