Personal finance advice

Advice on taking out a loan

Let’s face it, at age 50 or above we are all already thinking about retirement (even though it still feels an age away). Well, if we are brutally honest, we have been thinking about it since we were 18… and maybe even earlier!

However, by the time we reach 50, the thought of retirement becomes much more real and when we are still struggling to make ends meet; retirement can seem much more of a dreaded reality than something we have been looking forward to for most of our lives.

I take incredible exception to a scaling down, ‘penny pinching’ mentality. Just because we are getting older does not mean that we should have to lower our standards in order to ensure that we maintain our standard of life.

Due to this, it is still important that we have exactly what we need in order to continue with our day to day lives. For example, if we need something fixing on our car after it has had an MOT or our boiler needs a repair because of a fault then we should not be scared to fix it purely because of the financial implications.

Despite this somewhat ‘care free and easy’ attitude, I know exactly what you are thinking while reading this: “I have a poor credit history and I have been denied a loan in the past. At my age, nobody will offer me a loan or credit.” This, however, could not be less true.

Despite credit history often being a barrier to securing a loan, we can now bypass our credit history by taking out out what is known as a ‘guarantor loan’ instead.

You are eligible for a guarantor loan if:
• You have a friend or a family member who has agreed to be your guarantor if you are unable to pay your loan repayments.
• Both you and your guarantor are in permanent employment.
You can even take a guarantor loan out if:
• You have a poor credit history.
• You have been decline for an unsecured loan.

In taking out a guarantor loan, you are able to rebuild your credit history and you do not have to secure the loan against your property as it is reliant upon a second person who will make the payment if you are unable to do so.

For more information on the finance of guarantor loans, visit 1st stop for quotes and more detailed information.


What to Do When you Have No Credit History

We all know that having good credit is great, and that having bad credit is something to be avoided. But did you also know that having no credit history whatsoever can be just as damaging as having bad credit? People who have no credit history often find it just as hard to get credit, loans or financing as people who have a bad credit history. And although this may not seem fair, there is a reason behind it.

Credit = Trust

Put simply, your credit score is a measure of trust. It shows lenders the extent to which they can trust you with their money. If you have a good credit history, this indicates that you have borrowed money and paid it back on time, with few or no defaults. If you have a bad credit history then this means that you have most likely defaulted on more than one loan, and you may even have a CCJ. But if you have no credit history at all, this likely means that you have never borrowed any money. And if you’ve never borrowed, then unfortunately lenders have no way of knowing whether or not you are financially trustworthy. So this is why having no credit can sometimes be just as detrimental as having poor credit.

What Can you Do to Get a Credit History?

It’s a catch 22 that the very thing you need to do to get a credit history – borrow – is the one thing that having no credit history often prevents you from doing. However there are many ways to get around this.
One such way is to find a lender who specifically states that they provide credit for people with no credit history. For example; The 1st Stop Group provide guarantor loans, which are loans that require a third party to co-sign against your loan. This is a great option for people with no credit history, and in particular young people whose parents would be willing to act as guarantors.

How Will Borrowing Help my Credit Rating?

The more you borrow, the more detailed your credit rating will be. But remember, if you develop a poor credit rating, this will be just as – if not more – damaging than having no credit rating. So always borrow wisely, budget for your repayments, and never borrow more than you can afford.

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