Many people have suffered financial difficulties in the past because of their poor credit rating. A poor credit rating is achieved when you make regular late repayments on bills and debts, or worse still miss repayments altogether thus defaulting on your financial obligations. Once you have a bad credit rating you will find it difficult to get any sort of affordable finance in the future, and this includes loans, credit cards, and even a mortgage.

Over recent months, since the onset of the global credit crunch, the situation for those with damaged credit has become much worse, as lenders are more reluctant than ever to take a risk on borrowers that have defaulted on their repayments in the past. Tighter credit conditions have left many people with poor credit out in the cold, with lenders now focusing their attentions on those with very good credit in order to reduce risk to themselves.

Up until the global credit crunch took a hold in the UK even those with damaged credit were able to get finance from some lenders, with a number of lenders specialising in credit cards, loans, and mortgage for people with damaged credit. However, the number of lenders, and the eligibility criteria, has changed since last summer, when the global credit crunch made its way to the UK.

However, this said there are still some deals available for people with bad credit, and these deals can even help to restore your credit eventually providing you are sensible and responsible with both your borrowing and your repayments. Amongst the different types of finance that you can get for those with bad credit are credit cards, loans, and mortgages. However, consumers with damaged credit need to be aware that getting finance is a lot harder than it was a year or two ago, as it is for all consumer groups.

There are a couple of credit card providers that offer low limit credit cards to those with damaged credit, and this includes Capital One and Vanquis. The interest rate charged is extremely high on these cards, and the idea is to use the card regularly and then repay the balance within the interest free period. This will ensure that you are not charged hefty rates of interest on your borrowing, and could help to boost your credit rating over time.

When it comes to getting a loan you may find that your credit rating stops you from getting an unsecured loan, and therefore you may find that you need to be a homeowner. Again, the rate of interest charged on secured loans and mortgages for those with bad credit will be significantly higher than the rate charged to those with good credit, but you can then switch to a lower interest loan once your credit rating starts to improve.

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