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Shopping For Credit

Especially if you are new to the credit game, and have not yet established your own personal credit, you may be unsure of what kind of deals you can get with your own credit, in terms of interest rates and stipulations. The idea of window shopping for loans and credit cards seems like a far fetched idea if you are a no status borrower, and you are resigned at this point to take whatever it is that comes your way in terms of a line of credit. This does not have to be the case, and in fact, shopping for credit, the same way that you would shop for new shoes or a great deal on a hotel is an integral part of establishing good credit in the long run.

Why is it important to have good credit?

You may think that credit is not important to you. You would rather have no credit at all than fall prey to the terrible interest rates and easy money that may have gotten to friends or family in the past. That is understandable, but unwise. In the long run, when purchasing a home, a car, or even leasing a flat, having no established credit can be just as detrimental as having poor credit. You want to begin building your good credit as early as possible, so that when you come to these junctures in your life, it is not something else that you need to worry about.

How can you get good credit?

There are a number of ways to begin building your credit. Secured loans or credit cards are a good source for building no status credit into established credit. If you are looking for a loan to make a large purchase or to fund a trip, a secured loan may not be the best plan. However, if your goal is to establish your good credit, then putting some capital into a secured loan is a good way to start. A secured loan is more likely to have a good interest rate, because the lender knows that no matter what, they have an avenue from which to get the money that they have released to you. This way, in the long run you can spend less to build a base for your credit. Do not accept the first offer that you are given. If you have money to put into a secured loan, go to a couple of banks, and find out what will cost you the least in the long run.

Why is it important to shop for credit?

The better a deal that you get when you initially begin building your credit, the more likely it is that you will be able to carry out the terms of your lending contract. The shorter the terms and the lower the payments, the more realistic it becomes for the borrower. If you take the first line of credit you can get with a very high interest rate, it can cost you a lot in the long run, and you do not want to start off behind in order to build your credit record.

 

 

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