Poor Credit Rating

There are many things about involvement with the criminal justice system that can lead to financial struggles. Lack of employment, loss of supportive family relationships and loss of housing can all leave people in a vulnerable position.

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Many people find themselves struggling to keep up payments on their mortgages and personal loans, leading to what is known as a poor credit rating (sometimes known as a credit score).

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What is a Credit Rating?

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A credit rating (also called a credit score) is a number that potential lenders use to decide how likely they think it is that you will be able to pay back anything they lend to you.

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Your financial history, whether you've missed loan payments in the past, your income and even whether or not you are listed on the Electoral Register, all impact on your credit rating.

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How can I find out my credit rating?

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There are three main credit reference agencies who provide information to lenders. You can request a copy of your information for free from each of them.

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TransUnion
Online: www.transunion.co.uk/consumer-solutions
By phone: 0330 024 7574
By post: TransUnion, One Park Lane, Leeds, West Yorkshire, LS3 1EP

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Equifax
Online: www.equifax.co.uk
By phone: 0844 335 0550
By post: Equifax Credit File Advice Centre, PO Box 1140, Bradford, BD1 5US

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Experian
Online: www.experian.co.uk
By phone: 0800 013 8888
By post: Experian Ltd, PO Box 8000, Nottingham, NG80 7WF

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How can I improve my credit rating?

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Glasgow Credit Union provides an excellent summary of the steps you can take to improve your credit rating:

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• Check your credit report with credit reference agencies.
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• Prove to lenders that you’re capable of managing your finances effectively.
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• Always make payments on time.
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• Register to vote on the electoral register.
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• Close unused credit card accounts.
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• Check if you are linked, financially, to another person.
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• Reduce or clear high levels of existing debt.
  

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More information on each of these points can be found on the Glasgow Credit Union website.

Source: Glasgow Credit Union

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Who might lend money to me if I have a poor credit rating?

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Credit Unions

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Credit unions are member-owned financial institutions that offer fair and affordable loans to their members. They often have programmes specifically designed for people with poor or limited credit history. There are credit unions in many areas of Scotland, including:

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• Glasgow Credit Union
• Grampian Credit Union
• Scotwest Credit Union
• Castlemilk Credit Union
• HI-Scot Credit Union

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Specialist mortgage brokers

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If you are looking to buy a house, but are struggling because of a poor credit rating, you may find that a specialist mortgage broker is able to help you.

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Mortgage brokers, particularly those specialising in supporting people with poor credit ratings, will be able to take all of your circumstances into consideration and advise you on the lenders most likely to provide you with a loan.

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The dangers of loan sharks

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Sometimes when people are in financial crisis they find themselves preyed on by illegal money lenders (also known as loan sharks). Borrowing money from loan sharks can lead to a cycle of debt that is almost impossible to escape.

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Our Illegal Money Lending page has information on what to do if you or someone you know have been taken advantage of by a loan shark.

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Where can I get help?

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• The Money Helper has a series of online guides on a wide range of money troubles.
 
• The Financial Conduct Authority (FCA) have a register of authorised lenders. Making use of this list can help you to avoid turning to illegal money lenders.‍
• StepChange, National Debtline, Debt Advice Foundation and Don't Fret About Debt all provide free, confidential and independent advice on how to deal with debt problems.

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