Poor credit ratings are affecting an increasing number of people

Perhaps you have been turned down or refused a personal loan because of bad credit history, or have been told you have a low credit score because of past debt problems, or maybe you're having difficulty getting a loan because you are self employed. Whatever your situation there may be lenders who can help and its important to shop around as loan rates vary immensely from lender to lender.

A number of people now find themselves having to turn to poor credit loans because they are unable to access credit from high street banks.

Poor credit ratings are affecting people in every section of society. In the current financial climate even a single mishap in someone's credit history, such as a missed payment on a mobile phone bill, is now taken more seriously by lenders.

Missing a credit card payment, forgetting to pay a utility bill or incorrectly setting up a direct debit resulting in a payment not being made on time can all trigger an impaired credit record. Even late payments will be highlighted on your credit file and will count against you. Such discrepancies can result in your credit rating deteriorating, which usually means you'll have to pay a higher rate of interest to reflect the increased risk you represent to the lender.

It's all in the score

Consumer indebtedness as a result of the economic downturn continues to be an issue, therefore lenders are likely to place even greater importance on credit scores for the foreseeable future.

A credit score is a mark you are given by a lender when it considers your loan application. The higher your score, the greater your chances of being accepted for a loan.

A low credit score will almost certainly preclude you from obtaining credit from a mainstream lender.

Lenders have different algorithms for determining scores, but in general they will examine the contents of your credit report which they access from one of the credit reference agencies in the UK, Experian, Equifax and Callcredit. Your credit report contains a variety of personal information to help lenders avoid identity fraud and determine whether you are creditworthy. It provides a summary of your current debts including details on any loans, mortgages and credit cards you have and whether you have made your repayments on time. It also lists any insolvencies, repossessions or County Court judgments (CCJs) you have registered against you.

Having a number of credit cards where you have reached or are near your credit limits will be cause for concern for lenders as will regularly hitting the bottom of your agreed bank overdraft facility.