Apply for a Loan with Bad Credit Rating

Can you get a loan without destroying your credit rating?

The devastating retail credit scandal published yesterdays revealed that homes are facing a shocking 400 million raid from the "broken" economy. Bankers damage borrowers' creditworthiness by reluctantly telling them what interest rates you will get until you apply, and using "sneaky tactics" to conceal credit sanctions, says Paul Pester, head of TSB.

You should start by reviewing your creditworthiness. Otherwise, you should contact the three most important credit bureaus - Experian, Equifax and CallCredit. And the next thing is to find out which bank you will be accepting. This will tell you your percent chances of being approved by any of the major creditors.

You are now prepared to find out how much interest the bank is charging. Somebody who lends 5,000 faces installments of up to 13.9 percent, the investigators found. Historically, bankers have told you what you get after you have officially applied for credit and undergone a "hard" credit review. It will leave a mark on your credit rating and make you less appealing to other creditors.

A number of creditors are offering so-called "soft" deals before you apply. That means that a prudential institution checks your creditworthiness and tells you whether you are likely to be admitted and what interest rates will be quoted to you - without imprinting your record. At HSBC we also provide loan and quote services for non-customers.

Big money houses may not have the best tariffs, so you might want to buy some. Taxpayers Bank and Sainsbury's provide the lowest cost lending rate of 10,000 over three years at 2. 8 per cent annual interest rate. However, while there is a tender proposal from T-Systems before use, Sainsbury's does not. There are other companies that provide these services: Nationwide, RateSetter, Zopa and Ikano.

As soon as you know the installment that you can anticipate and whether or not you are likely to be authorized, you can choose whether to opt for a top-deal that will require a tough credit review. Three percent. Be sure to read the small letters before signing: the best tariff is not always the best offer.

The TSB says that many bankers conceal information about how quickly you can get the cash. Over half the bank will bill you a commission if you want to spend a few extra month. Nearly two third calculate a penalty if you want to repay the loan early. Verify that your creditor is offering credit leave.

When you have an outstanding loan, you may be able to make a less expensive transaction elsewhere - either because interest has dropped or because your credit rating has increased.