There are four elements of a loan process, including the applicant’s monthly income, guarantor, collateral and credit score. An individual rarely fulfils all these conditions while applying for a loan. There must be some lack, whether you do not have collateral or a guarantor or you are struggling with no job or with a bad credit score.
When it comes to the credit score, numbers are huge of people having poor credit ratings. However, it does not mean that individuals with excellent or good credit ratings are very rare. They are also available in decent numbers in the UK.
The primary thing is that credit score does matter a lot during the loan process. Whether you need to borrow £1000, £10000 or £100000, you have to show your credit profile. You cannot spare from it, and you need to fulfil the lender’s criteria regarding the credit ratings. There is another thing that needs to be discussed early in the blog. We are talking about the different credit score criteria of mainstream lenders like banks and modern-day lenders.
Let us take our discussion ahead on the importance of credit score.
Why is credit score an essential element of a loan process?
You must be wondering why we have been putting too much emphasis on the credit score. It is not a matter of us. Instead, you have to face it as a reality.
Whenever you go for a short-term loan or a long-term loan, your lender will be curious to know your credit score. However, things become more stringent for the loans with longer duration. Exceptions are there for smaller amounts, and especially direct lenders are keen to be flexible. For instance, they can give you the advantage of a short-term loan with no credit check provision.
The significance of credit score during the loan process can be defined in 3 crucial manners. These are:
- Credit score shows your past performance in handling the payments. Lenders will take it as the base to give you a loan approval or not.
- Credit score reflects your sincerity towards your financial life. Not only the payments but lenders also want to know how you have handled your previous loan repayments.
- Credit score is like the proper illustration of your financial creditworthiness. You get the loan amount which you can afford.
Ways to get £10000 despite any issue of credit score
We have already defined the credit score as the crucial factor in the loan process. However, it does not mean that you should be overthinking this aspect whenever you need a loan. Let us take an example of £10000. It seems a huge amount, especially if your credit score is poor or adverse. Still, direct lenders can offer you those funds, which you can get by following these ways:
- Look for an affordable amount
The first thing that you should pursue is to stay with an affordable amount. Analyse your current financial situations and needs to decide the right amount. Besides, use the loan calculator to check how much the amount will be safe to borrow particularly when you have a poor credit score.
Never go beyond your affordability. 10000 pounds is a significant amount to manage considerable costs, but remember, you need to repay it along with the interest rates. Therefore, borrow what you can repay later.
- Go for an online application only
If you have a good credit score, you can freely approach mainstream lending institutions because they will accept your application. You do not mind submitting documents, filling out offline forms, and waiting for days to get the approval. You know what will be the outcome.
Things get wholly changed when your credit score is not on the acceptable scale. It means you have a bad credit score. It is obvious that you do not want to go for credit check or submitting documents. Therefore, the best way to get pound 10000 online where minimum paperwork is needed and everything will be instant.
- Apply with collateral or a personal guarantee
When your credit score is bad and mainstream lenders are not showing interest in your application, it will be better to arrange either collateral or a personal guarantee. It is perhaps the best way to do this among the many suggestions.
Your poor credit score reduces your financial credibility. If you provide a personal asset to secure £10000, the lender will be relaxed and will not hesitate to approve your loan application. However, not everyone has the collateral. In such a scenario, you can arrange a guarantor with a good credit score. You can convince the lender of proper loan repayments with a personal guarantee.
- Be good in your stable monthly income
Many people are there who have been in trouble of not having an asset or a person to be your guarantor. It is a tough situation, but now the significance of bad credit lenders in the UK comes here. They are more flexible than traditional lenders and ready to offer various advantages. As mentioned above, you can seek short-term loans with no credit check. Instead of looking at your past credit, they look at the stability of monthly income.
If you are good at earning a steady income, lenders feel comfortable giving you the loan approval as you can easily manage the repayments.
- Do genuine efforts on credit score upliftment
Apart from the above factors, lenders also look at your sincerity towards the credit score improvement. Yes, it is a big factor too if you want to get an amount of pound 10000. Lenders will be happy to see you show interest and effort to enhance your credit profile.
The best way to do this is to repay the amount on time. Do not default or apply for a secured loan or a guarantor loan to keep the lender satisfied. One more thing to pursue is to avoid having too much debt sometimes, especially while applying for a loan. Following these things will maintain your credit score on the improvement.
Conclusion
No one can deny the importance of credit scores during the loan procedure. If you decline it, then it will be a huge problem for you only. Instead, keep your focus on your credit score. You should either keep it at the good or at least fair level or make constant efforts to improve it.
In a nutshell, your credit score opens the door to borrowing the desired amount and takes you to a room of peace of mind.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
