When there is a situation where you really need money, and fast, it can really feel like there aren’t a lot of options if your credit score is too low to get the solutions available to people with better credit ratings like overdraft facilities, credit cards, and business financing for SMEs
Poor Credit Ratings
There are a lot of reasons why you might have a low credit score, from financial problems or poor money management in your past, through to simply having no history with credit that can be referenced as a means to determine whether or not you can be trusted to repay debt responsibly. However you ended up with a poor credit score, there are of course ways to fix it over time, but these all take a while, and that is not what you need when an unexpected expense has appeared and you really need access to funds right away.
Here are some of the ways you could potentially approach this situation:
Look For a Short Term Loan From A Provider Specialising in Poor Credit Applicants
There are loans out there that have been created with people with poor credit in mind. As you might expect, you’ll have to pay more interest on bad credit loans than someone with a better credit rating would have to pay on an ordinary loan, so the shorter the term of the loan the better. You will not, also, get the same amount of flexibility in terms of how much you can borrow or your repayment schedule, though this can be a relatively hassle free way to get access to money fast when you are in an emergency situation.
Always make sure you pay these kinds of loans off without fail, however, as with them being targeted at people with poor credit histories a lot of risk is factored into their terms, and this means you can end up owing a lot quite quickly if you don’t meet repayment terms, as well as making your credit rating even worse.
Credit Building Credit Cards
Credit building credit cards are really designed to help you boost your credit rating over time by using them and repaying them reliably. They do, however, give you access to some money (though this may only be £250-£500), which you could use to help with your emergency and then pay off when you get paid. Because they are aimed at people with poor credit you are likely to be accepted for one, and can therefore have a solution to your emergency expense if the amount you need is within the realms of what one of these cards can give you. You only need to make the minimum monthly repayments to this card to be improving your credit rating, but it is best to pay it all off as soon as you can to avoid high interest payments.
These are two options that can help you out when you need emergency money and your credit score is low. They are also things that can have a good (or bad) effect on your credit score.