Understanding Poor Credit Loans and Recovering Your Credit Score


Maintaining a good credit history is beneficial when applying for loans. However, even if you have a bad credit history, you can still have the chance to get loans and improve your credit status in the process. Poor credit loans are different from regular loans, as they're intended for borrowers who fall outside the typical lending criteria. Knowing that tough times sometimes lead to poor credit records, some lenders refine and adjust their lending criteria to give borrowers a chance to apply for a loan.

How Poor Credit Affects Loan Applications

Having poor credit means that you have missed or have had overdue payments which caused a negative impact on your credit rating. Generally, lenders review your loan history and credit rating to see if you're capable of repaying new debts on time. If you have a poor credit history, then you'll have limited options when applying for a new loan and often can't borrow as much as you would like. You may find it hard to get your loan approved because lenders view you as a high risk.

There are many reasons why you may have ended up with a bad credit history. For example, you may have an old phone bill default that has now been paid already. Or you may have late or missed credit card and loan repayments for a valid reason such as your bill going missing in the mail. If you have unpaid bills that are past their due dates, it's best that you settle them first before applying for a new loan.

Recovering your Credit Score

Poor credit loans can help gradually improve your credit score. When you take out a bad credit loan and settle it on time, it helps prove that you can repay a loan promptly, and your finances are under control. By consistently paying loans by their due dates, you may be able to improve your credit worthiness and secure bigger loans in the future.

At The Little Loan Shop, we often lend short term cash loans to borrowers with poor credit history because we understand that difficult situations happen, and we're flexible in providing cash advance loans. Our lending criteria are less strict compared to banks and other lending organisations. On your first payday loan application, we will perform a credit check, and we will also verify your employment and income. However, if you have a really bad history or you're currently bankrupt, we have the right to decline a loan as necessary.

Our loan application process is easy, and our approval time is fast. Fill out the simple form on our website to apply for a small cash loan today.