Whether hard times were to blame for your bad credit score, or irresponsible behaviour, trying to get finance again as a reformed character can feel impossible. Even if you find yourself in a position with a steady income, with a bad credit score you will be seen by lenders as high risk, with most of them only willing to lend at an extremely high interest rate. Here, we talk through a few options for getting finance when you have a bad credit score.
Do you have assets?
Your credit rating is not the only thing that lenders take into consideration when assessing you for finance. If you own a property for example, lending against this is one good way to get the credit you require. Most lenders will be willing to lend against a large fixed asset such as a property providing it has enough collateral in it. Similarly, if you have jewellery or a desirable vehicle, reputable pawn shops could help you out with finance.
Do you have cash flow?
While an average income will not be enough to sway a lender, proof that you are receiving substantial cash payments will be something they can take into consideration. This could be from property rental or business contracts. Either way, if you have contracts to prove that this will be incoming, it is a positive start.
Do you have a business?
If you own your own business, then finding a partner or investor of some kind is an option, providing that you can show good profits and projections. Do bare in mind the level of control you may have to give up upon selling a share of your business.
Do you have a guarantor?
If you have a close friend or family member with assets, and faith in your ability to pay back the finance, you can ask them to act as a guarantor for you. This does mean however that they could lose their property should you fail to keep up the repayments on your finance, and so this should be figured out very carefully.
Is the finance for a specific project?
Crowdfunding websites have popped up all over the place, and it allows the individual to give creative ideas, or something similar, in exchange for payments from the site users. This is an excellent tool if the money you require is for something other people might find of interest.