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Avoiding Predatory Lenders

Britons are borrowing more money than ever, and consumer lending is an extremely lucrative trade for lenders. Unfortunately, this means that many illegitimate and untrustworthy lenders will be seeking a share of the market. They often target those who are most vulnerable and desperate to receive credit. It is important that consumers are aware of the methods they can use to protect themselves.

First of all, consumers should know which are the target markets that predatory lenders aim for. These are the people most likely to get into trouble. There are also consumers outside these target markets that are duped into believing the claims of such lenders.

The groups most vulnerable to unfair lending practices are senior citizens, minorities, single parents and the poor. These are the groups likely to be least educated on the risks of unfair lending practices. Other high risk groups are students and young adults with little experience of the market, people with bad credit and those without an established credit record.

If you are seeking a loan, you should understand how personal credit scores work and how they effect your credit applications. Even if you have no, or a bad credit record, there will be many options available to you and any lender that tries to convince you otherwise is likely to be a fraudster. Also beware if they are also offering you very high interest rates, high penalties or expensive buyer protection.

You should also be aware that free credit reports are often available. It is advisable that you check your credit report regularly to make sure there are no errors there. You will also have accurate information on where you stand if you are refused for credit.

Checking your credit rating can also reduce the risk of identity theft as you can ensure that the information held about you is accurate and up to date.

The only thing to remain aware of is that every time someone queries your credit rating it is recorded. This applies even if you are the one requesting the information. Some lenders will take the view that too many credit checks in a short period of time are a sign that you are being refused for credit elsewhere and hold it against you.

Therefore it is advised that you do not check your own credit score too frequently. About once a year is enough to make sure it’s accurate without damaging your score.

 

 

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