Finance for Tenants with Bad Credit Ratings
The internet and television are awash with adverts offering cheap loans, even to people with credit history problems, but many of these companies will only deal with homeowners. This is because they will only provide secured loans, which use your home as collateral (a guarantee that the loan will be repaid).
But if you don't own your home, for example if you're a tenant or you live with your parents, you don't have the option of taking out a secured loan. And, with most unsecured loan companies requiring a good credit rating, what can you do if you're a tenant who needs finance but have had credit problems in the past?
Tenant Loans
There are many companies who specialise in tenant loans even with bad credit, but it's certainly more difficult to get a loan when you're a tenant than when you're a homeowner. Tenant loans offered to people with impaired credit will usually be limited to smaller amounts, and will be charged interest at a fairly high rate.
Small Cash Loans
This kind of loan is similar to a payday loan. A small loan, usually of around £500 but sometimes up to £1000 or so, is advanced with weekly repayments made in cash. Small cash loans can be frighteningly expensive, but can be useful if you urgently need a small amount of cash for a short time, and don't want to enter into a long term credit agreement.
Credit Cards
Credit cards are a form of unsecured debt, which means that whether you're a homeowner or a tenant isn't taken into account when deciding whether or not to approve your application. What matters most is your income and your credit history.
Some cards are strict when it comes to accepting applications, while others will have more leeway and may approve people with less than perfect credit ratings. Barclaycard approve around half of applications according to recent figures, so if your credit rating is only 'less than perfect' you may stand a good chance.
Some cards, however, are specifically aimed at people with poor credit or no credit. Barclaycard Initial and Capital One Classic are examples. These cards will charge a high interest rate and probably offer a pretty low credit limit, but if you're accepted for one and operate your account responsibly, they can actually help to rebuild your credit rating.
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