The Problem of Bad Credit and Rising Debtby LoanTube UK LoanTube- Real Rate comparison site
After 11 long years from the Financial Crisis of 2008, the economy of
the UK is stable, but growing at a sluggish pace. Wage growth has been
continued to be the missing piece of the puzzle in the post-crisis recovery.
With a more serious geopolitical background – Brexit, currently looming over
the nation and the crisis in wages have led to the rise in personal lending. Since
2010, unsecured consumer credit has grown significantly.
Lenders are offering Poor Credit Loans in the UK and households with low earners are becoming increasingly dependent on these forms of finance as accessing the mainstream finance is relatively difficult and sometimes, impossible. According to the Labour Force Survey, out of 21 million households in the UK, only 12.4 million are classed as working and 2.9 million are classed as workless. The dependency has suggestively contributed to the rising debt in the UK.
The financial regulator of the city – the Financial Conduct Authority declared capping of interest rates to curb the issue of the rising debt and to protect the consumers from being financially exploited by high-street lenders in 2015. Post that, many lenders adopted new ways to sidestep the regulation to continue providing unsecured credits to the people. The lenders willingly take the affordability risk for the borrowers. However, they have to perform a mandatory credit check before making any decision. More and more people seek for Loans for Poor Credit with No Guarantor because of muddied credit history.
A credit score is a measure of an individual’s personal finance management and due to a bad one, they are often unable to gain access to affordable credits. As a result, they turn towards High-cost Short-term Loans for fulfilling their basic necessities.
Financial instabilities in households have a huge and marked impact on a nation’s economic growth. People who have confidence in managing their money do not face such situations, however, a financial shock can turn the complete scenario upside-down. A good credit score is crucial in today’s financial market. Lack of access to affordable rates enforces an individual to opt for other alternatives, which may be expensive. Building a credit score requires dedication and discipline – timely repayments. That’s the key to build and maintain a good credit score. A spotless credit history means a borrower has chances to find and avail loans at a favourable rate of interest rather than paying a hefty amount.
The government along with the FCA are working towards a common cause – to steer away from financial exclusion and to help consumers eradicate the financial difficulties. Regular monitoring and screening of loans are performed by the financial regulator to improve the standard lending practices. The role played by a borrower is instrumental in building a credit score. Money management is important to maintain financial well-being.
Borrow responsibly, repay timely!
Created on May 31st 2019 08:41. Viewed 257 times.