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How can I borrow money with a bad credit history?

When you’re looking for credit, there are so many options out there. From loans, to credit cards and overdrafts... but what is the best product for you if you have a less than perfect credit history? Maybe you need something entirely new!

How does a credit score affect your lender's decision?

A credit score is a statistical number used to evaluate your creditworthiness in relation to your historic ability and demonstrated responsibility of repaying debt. Although, a large combination of factors may impact your credit score, the top three factors you should consider before applying for a credit are your payment history, your credit limit and number of hard enquiries.

The three Credit Reference Agencies (CRAs) in the UK, Experian, TransUnion and Equifax, all use different ranges to assess your credit score, but generally the higher the score, the more creditworthy you are considered and the more likely a lender is to approve your loan request. For more detail check out our Beginner’s guide to credit scores.

What options are available if you have a less than perfect credit score?

Has your credit rating suffered a few hits over the years? Or perhaps a recent change in circumstances has had a negative impact on your credit file?

With a poor credit history, it is likely that you will be considered a high-risk borrower. This may make it more difficult to be approved for credit or you may only be offered credit with a higher interest rate until you build up your credit history.

Although it may seem impossible to get credit with a low credit score, there are financial products that can offer you access to credit and help you rebuild your credit record at the same time. So, what are your options?

Credit-building cards

A credit card is a card, issued by a lending institution, which allows customers to make purchases that can be paid for in the future. They are convenient and flexible to use on an ongoing basis. Some lenders offer credit cards which are specifically designed to help you improve your credit score. The offered credit limit is often low in the beginning but may increase if you can demonstrate that you can manage your credit responsibly. To demonstrate financial responsibility, you must pay back at least the minimum amount set by your lender on time.

Guarantor loan

If you need credit for a one-off expense rather than for ongoing credit use, a short-term loan may be the best option. It may be difficult to get approved for a payday loan with a poor credit history, however a guarantor loan may grant you access to credit. A guarantor loan requires a nominated person to act as a guarantor and co-sign the credit agreement. You will need a guarantor with a good credit history to secure a loan. If you are unable to make your repayments, your guarantor will be obliged to cover the repayments on your behalf.

Credit Line

A credit line is an ongoing form of credit which you can use to borrow money as and when you need it. You apply for a credit limit and if approved, you can transfer funds into your nominated bank account. You will need to make monthly repayments towards your balance but the repayments are flexible to help fit your needs and your budget - pay the minimum repayment amount one month, repay more next month or repay your full balance at any time that you want. As long as you comply with the terms of your credit agreement, you can continue to make further transfers of any amount up to your credit limit at any time. The ease of access and the flexibility of repayments can make a credit line an excellent choice. Find out more about credit lines.

We created the Polar Credit Line to take the best aspects of all the other options and provide you with access to credit in a fast, easy and transparent way.

Will Polar Credit approve my application if I have a poor credit score?

We understand that not everything always goes according to plan and you may have missed payments or even have past defaults on your credit file. We use our proprietary technology to consider a variety of factors which go beyond just looking at your credit score to understand your application.

We consider your present situation and understand that most people have valid reasons for missing their payments in the past and it does not mean that they are no longer creditworthy. We know that access to credit is important. Our bad credit loan alternative helps people: who may not qualify for a loan from a bank, to borrow money without needing a guarantor or to avoid paying the high interest rates associated with payday lending.

Our 100% online application process gives you an immediate decision and tells you your credit limit straightaway. Find out more about our application process.

Whilst Polar Credit can be a useful solution to your credit needs, please remember that you should only take credit that you can afford to repay as late repayment can cause you serious money problems.

More information

What is my credit limit?

How do I increase my limit?

How do I decrease my credit limit?

More questions? Read our extended FAQs or Contact us

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Representative Example: Amount of credit: £1200, interest rate: 49.9% pa (variable) and 1.65% transaction fee. Representative 68.7% APR (variable)

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