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How technology is helping people with bad credit

By having a bad credit score, it can significantly limit your ability to access finance and credit from mainstream lenders. You are considered a higher risk of default and therefore some lenders may be reluctant to offer your finance on basic terms.

Around 10% of the UK population is considered to have bad credit or ‘in debt’ and have admitted they may never be debt free. However, it is not surprising as due to hard times or people commonly spending more than they earn, it is no wonder those UK households often fall behind on repayments of credit cards or loans.

However, for many people, having bad credit is a temporary problem and many have the genuine intention to work to improve their credit score through various means. Thanks to the technology of the modern day, there are plenty of news ways that can help you build up your credit score as well as finding the right financial products for you, explains paydaybadcredit.co.uk.

Credit Builders

There are a number of portals and memberships which will allow you to closely monitor your credit score, whether it is going up or down. You are able to check your credit score on the likes of Noddle, Experian or Check My File. On these, you should be able to view your credit score for free and then sign up to a membership which will allow you to continue doing so.

You will find that Portals will also give you suggestions to improve your credit score including closing some of your debts as well as joining the electoral register. Over a period of time, this will allow a person who has bad credit to build up their rating and gain better access for financial products at more affordable rates, which are not currently available to them with their score as it is.

Eligibility Calculators

To aid those who have bad credit, many comparison websites and credit providers alike have begun to offer an “eligibility calculator” on their websites. How these work is that they allow individuals to enter their details online as if they were going to be applying for a loan or some kind of credit. They will then display a list of companies which may fit their criteria and their circumstances.

This method is being used by a variety of finance comparisons including Money.co.uk, Money Saving Expert and Choose Wisely.

The eligibility calculator is obligation-free and will only perform what is known as a ‘soft credit search’ on your credit history. This will not affect your credit score and not mean that you will find it harder to obtain credit.

Canopy

A new app called Canopy has been developed to allow tenants the opportunity to build up their credit score by simply paying their rent on time. Whilst tenants would previously not be credited for making regular payments on time, the app connects landlords, tenants and credit reference agencies and means that customers can be rewards to staying on top of their rent.

Given that some people will always be renters and the trend of living in the UK means less and less people are becoming homeowners, this offers a viable opportunity for young people and those of all ages to build their credit score accordingly.

Blockchain

Whilst Blockchain is still in its early stages, it has attracted a large amount of investment from both venture capitalists and international banks. With the use of distributed ledger and decentralised banks, it opens up far more opportunities for customer with subprime credit.

Other research that the use of credit scoring, bank statements and payslips may become increasingly less important to approve a loan. The emergence of smart contracts has meant that lenders able to validate transactions and verify the legitimacy of counterparties much more effectively now.

Claire Preece

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