Loan comparison site for people with bad credit scores launches in the UK | Personal Finance | Finance

A new comparison site designed for people with bad credit has launched in the UK, aiming to meet the needs of the 1.8 million people who search for bad credit-related terms every month.

The site, BadCredit.co.uk, helps match customers with bad credit scores with the lowest APR lender on their panel willing to accept them.

The site is said to operate entirely independently and impartially and also works to protect customers’ credit scores from further harm, being that only a soft search is performed when retrieving a quote.

Paul Gillooly, company director at BadCredit.co.uk commented: “Google data shows that every month, 1.8 million people in the UK are searching for terms like ‘bad credit loans’ or ‘bad credit car finance’ and overall these numbers are increasing.

“This segment of the credit market tends to be neglected and underserved. People with low credit ratings still encounter emergency financial needs but tend to be excluded by traditional lenders and the big comparison sites.”

The site offers access to over 70 providers to help people compare prices for loans, credit cards, or car finance, for those whose low credit score hinders them from using a mainstream lender.

The user gets a no-obligation quote from their matching lender, and if they choose to proceed, a hard search is performed to finalise the application.

Mr Gillooly added: “Although we identify as a comparison site, due to the fact that many of our users are having problems getting a loan, the emphasis is more on finding a lender that will accept the applicant based on their credit history.

“Unlike other comparison sites, it’s not necessarily about presenting the cheapest whole-of-market loan but more about finding a willing lender for our customers.”

Poor credit scores are costing millions of credit card customers hundreds of pounds every year. According to research by TotallyMoney, on the average balance, those with a poor credit score could be paying £1,371 in interest compared to £657 for those with a good score (an extra £714).

For those looking for some quick – and long-term fixes to better their credit score, Andrew Hagger, personal finance expert at Moneycomms.co.uk shared five.

Mr Hagger said: “Stay in check. Your credit report contains all the information lenders use when deciding whether or not to let you borrow money. So keep an eye on it — it’s free to do, and won’t have a negative impact on your rating.

“In fact, it’s quite the opposite — on average, people who check their report have a higher credit score. So, keep an eye out for any out-of-date or incorrect information, and if you see something that’s not right, then raise a dispute.

Secondly, Mr Hagger suggested people register themselves on the electoral roll. He explained: “Getting on the electoral roll can mean a vote of confidence when applying for credit.

“It’ll mean banks can make sure you are who you say you are, and so they’ll be more likely to give the thumbs up when deciding whether or not to lend to you. Plus, if you’ve been at the same address for a while it can make you appear to be more settled and stable.”

Mr Hagger also suggested people focus on building their credit profile. He said: “You might think that banks will look more favourably on people who haven’t used credit — maybe because you’ve managed your own money well, and haven’t needed to borrow before.

“However, this can lead to having a ‘thin file’ and as a result of not having much information to base their decisions on, lenders might be less likely to offer you credit. Getting a credit builder card, and household bills in your name can help ‘thicken’ your file — so when checking your report, have a look at how you can start building your credit profile.”

Keeping an eye on credit utilisation is key to obtaining a good score. Mr Hagger explained: “Simply put, ‘credit utilisation’ is how much available credit you’re using, and the suggested amount is to keep within 25 percent of your credit limit.

“So, if your card lets you borrow £1,000, then you should try to use no more than £250 of it. This will show lenders that you’re good at managing your money, and you’re not struggling to keep up.”

Finally, people should make sure to manage their payments properly. Mr Hagger said: “To get a good credit score it’s important to show that you’re able to manage credit accounts. This means never missing payments, and if possible you should always try to pay more than the minimum.”