**Warning:** Late repayment can cause you serious money problems. For help moneyhelper.org.uk | **Representative APR: 79%** | The Money Shop is a trading name of New Horizons Finance Limited who is an introducer appointed representative of Flux Funding Limited, who are an authorised credit broker, not a lender.
**Warning:** Late repayment can cause you serious money problems. For help moneyhelper.org.uk

How Long Does Bad Credit Last & How It Can Affect You

How long does bad credit last, and how can it affect you?

Getting into bad credit and having a poor credit history is a very common and easy thing to do in the UK. But that does not mean it is impossible to improve your credit score and get back to a position where your credit rating is much better. There’s a lot to know about bad credit and how it can affect you. It can be overwhelming at first, but fully understanding it is one of the best tools you can arm yourself with to improve your credit score.

Here, at the Money Shop, we are dedicated to helping people improve their financial situation – helping our customers make ends meet. We’ve put together this guide on bad credit so that you know not only what it is but also how it can affect you. We also explore the options available to you if you seek a loan and how The Money Shop can help you find a loan when a traditional lender turns you down.

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What is a bad credit rating?

A bad credit rating is the result of missed payments in your credit history. So, even if you only miss a couple of payments on a credit card bill or you have an outstanding invoice that remains unpaid, this can materially affect your credit rating and, therefore, your ability to secure a loan with a traditional lender.

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Your questions, answered

How long does something stay on your credit report in the UK?

Sadly, things can stay on your credit history for a long time – so if a lender runs a search on your file, these will show up and amount to a bad credit score. The minimum amount of time that black marks on your file will remain there is six years. But it can be longer.

Therefore, it is a good idea to take all steps you can to improve your credit rating to help balance out any black marks and help bring your credit score up as best you can. That also means ensuring in the future that you do not miss any more payments on debt you have or settling any overdue invoices as soon as possible.

To that end, it may be a good idea for you to consider consolidating any debt you have into one place, making it more affordable for you to pay off – and more quickly too.

Will I be able to get credit in the future?

Knowing that your bad credit can last for several years can feel overwhelming if you need a loan. It can make you feel like you will never get credit in the future, but that is not the case. At The Money Shop, our broker partner has access to several loan products, including bad credit loans. These loans are designed specifically for people with bad credit history in mind. They are structured to ensure that they remain affordable, allowing people to get out of debt and improve their credit rating at the same time. It means that should you have any unforeseen expenses that crop up that need paying, you can still cover them. By securing a loan with one of these lenders, you can meet all your outgoings and not further affect your credit rating negatively.

Am I eligible for a loan?

Lenders still run a credit check on all our applicants, but they also have to meet the following criteria as well:

  • You must be over 18
  • You must be a UK resident
  • You must not be bankrupt
  • You must have a steady income
  • You must have a bank account with a debit card

How can I apply for a loan?

To apply, all you need to do is follow the application process online through our website. We’ll ask some basic questions regarding who you are and what your employment status is, as well as asking you to prove where you have lived for the last three years. It doesn’t have to be the same house. You need to show that you have had a permanent residence all of that time. Our broker partner’s Lenders go over your applications as quickly as possible and, if your application is successful, your funds can be in your account on the same day.

Fortunately, our partner’s market-leading panel of lenders have a flexible approach to applications. While they still run a credit check on applicants, they do not automatically rule out those with bad or low credit ratings. Instead, they look at eligibility criteria to help us decide whether taking out a loan is something you can afford to do.

How can bad credit affect me?

Bad credit affects people in many different ways. Perhaps the most common and crucial ways that having bad credit can affect you negatively is when looking to buy or rent a home. When buying a home, many people need the help of a mortgage from a bank, and so, if you have bad credit, a bank or building society may be hesitant to extend you one. It could be that they will refuse your application altogether if you do not pass their credit checks.

Plus, if you are trying to rent a property, a landlord may not accept your application if you have bad credit. They will see a low credit score and worry that there is a much higher chance of missed rental payments in the future, so they may not let you, their property.

Bad credit can also affect your ability to take out other loans. Like mortgages, banks and other lenders may refuse your application completely – or charge a much higher interest rate than usual. They do so to offset the higher risk they perceive they are taking when lending you money.

Finally, bad credit can affect your ability to take out a credit card or have an overdraft agreed upon. Again, both are seen as providing a loan and, when you have a bad credit score, lenders assume that you will miss payments in future, so they refuse your application.

How can I improve my credit score?

Bad credit and having a bad credit score are not something that needs to follow you around forever. Other than settling outstanding debt, there are other ways that you can improve your credit score. While taking the following steps will not remove the black marks on your file any more quickly, it can help offset them as best you can.

  • Register for the electoral roll can improve your score.
  • Look at your credit rating file and make sure that it is correct. It can sometimes be that fraudulent activity made in your name will affect your credit score. If you spot suspicious activity, notify the relevant bodies as soon as possible and get it changed on your file.
  • Consider debt consolidation where you have just one loan and one monthly repayment. 
  • If you have credit cards, try not to spend your entire credit limit each month. Doing so alerts lenders to the fact that you are not able to make your paycheque stretch until payday. Instead, only spend up to a quarter of your credit limit every month.

How can The Money Shop help?

Bad credit loans are a great option for individuals who have found that the odd missed payment in the past has negatively impacted their ability to access funding now. Bad credit loans can be affordable and offer a competitive interest rate on the final loan amount. It means that you can get yourself out of debt easily due to making all the affordable payments on time – if not earlier. Our broker partner also has other products available that you may well be eligible for. Their wide range meets a variety of needs and circumstances.

Their panel of lenders allow our customers to take full control of their financial situation by giving them access to their account online. There, a customer can keep an eye on the outstanding amount of their loan. They can even make overpayments should they wish.

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