Adverse Credit Tenant Loans
Adverse credit tenant loans might be all that are available to you if you have an imperfect credit history and do not own your home. You might have a damaged credit record as a result of going into arrears on previous debt, have CCJs (county court judgements), or late payments of bills. Get a FREE credit report to check your status before applying for credit.
Adverse credit tenant loans are invariably more expensive than if you had good credit, because lenders will do a credit check and asses that you are not such a trustworthy borrower as someone with a spotless credit report.
They are also more expensive than adverse credit homeowner loans, because you are offering no surety to the lender. But, if you manage the loan effectively by keeping up with repayments and proving that you are able to avoid going into arrears, then this will improve your credit score and you can apply for more competitive deals in the future.
Advantages of adverse credit tenant loans include:
- Gives you access to credit
- Helps you rebuild your credit score
- Competitive deals available
- You do not have to risk your home
Disadvantages of adverse credit tenant loans include:
- Higher interest rates
- Size of the loan is limited
- Potentially damaging to your credit if you miss payments
Taking out a loan is a big responsibility. At least as an unsecured borrower you will not be putting your home at risk if you miss payments, but you do risk damaging your credit score even further, or being taken to court if you do not keep up with the repayments.
Before taking out an adverse credit tenant loan you should:
- Consider whether you really need it
- Ensure you can afford the repayments
- Find the best interest rates