Financial difficulty is something that can affect a majority of us at some point in our lives. Whether it is a sudden loss of job or an unexpected breakdown, this can all lead to finances becoming more stretched than we would like. But with financial aid on hand either online or through banks and other lenders, it is possible to have the help you need in just a few clicks. In this article, we will be looking into the options that you have when faced with a poor financial situation.
Managing Your Finances
When facing financial difficulty at any time it can be challenging, but by organising savings and limiting unnecessary spending can benefit you. Whether it is setting up an additional account or using a mobile application to help you set limits on spending, this can all benefit you in the long term. Though this will not completely eliminate the chances of financial difficulty, it will help you to maintain healthy finances as a result.
The Impact Of Financial Difficulty On Your Credit Score
Should you be suffering from poor credit of any kind, this can be damaging to your credit score. As a result, you must be monitoring the process and ensuring that you have everything you need at every stage. Whether this is by frequently checking bank statements or using online banking to monitor outgoings, this can help you to maintain healthy finances.
Though the qualifications for a great credit score can differ depending on the reporting system, Experian suggests that a good credit score is between 881-960. Finding out the credit score is as simple as a credit score check online, however, it is important to note that each reporting system has different guidelines.
It is important to note that checking the credit score yourself will not negatively impact it in any way, however, having lenders checking your credit score repeatedly can negatively affect it.
Options For Financial Aid
If you are struggling with poor credit, it may be difficult to be accepted for conventional lines of credit, this is because lenders may see you as a risk. However, because of this lower acceptance rate, there is the option of alternative lines of credit. Though there are still eligibility checks, these are less stringent than traditional lines of credit.
If you require a larger borrowing amount but have had difficulty being accepted for other loans, there is the option for guarantor loans. These are loans that require the signature of a guarantor alongside the commitment from the borrower. Should the borrower not be able to pay back the loan, it is the responsibility of the guarantor to keep up loan repayments. In order to qualify as a guarantor for someone, you have to be over the age of 18 and be financially stable in the eyes of the lender. If the lender themselves has poor credit then they are not likely to be accepted as your guarantor. It is vital that your guarantor is good with money and is financially stable enough to continue repayments should you be unable too.
When applying for a guarantor loan, there are checks for not only you as the lender but also the guarantor. These credit score checks will be stored on your credit score summary for 2 years. This provides the ability for financial aid to those that are struggling in terms of finances.
Bad Credit Loans
For those that are suffering from bad credit, there is the option for a designated bad credit loan. However, it is important to note that the interest rates on bad credit loans are often much higher than other loans. This is because lenders may see you as more of a risk due to your poor credit score. In addition to this, the loan terms are often much longer on short term loans allowing you to pay off the loan in several short instalments.
Whether you are currently struggling from financial difficulty or you are just looking at your options during this time, there are a number of options for you to consider that can all aid you in rebuilding your credit score over time. Which of these will you be choosing?