Poor credit rating 'is not that bad', says expert

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Poor credit rating 'is not that bad', says expert

Thu 30th Nov 2006

Individuals who find themselves with a poor credit rating have been urged to look around in order to secure the best loan deal, according the head of personal finance at The Motley Fool, an independent price comparison company.

David Kuo has urged people with a poor credit rating to make themselves aware of the possibilities available to them as well as visiting their bank to ask for loans rather than seeking help from home credit lenders.

The Competition Commission had launched a two-year probe into the home credit lending industry and recommended that they provide more transparency in terms of their loan charges.

Findings of the Competition Commission's research also showed that customers were currently being overcharged to the tune of £75 million.

Mr Kuo explained: "What happens these days is that a lot of the lenders are opting for credit scoring. You have a grey area of different types of credit unworthiness. This ranges from slightly sub-prime all the way down to people who are a credit risk. This is something that people have to realise - just because you are not good doesn't make you bad."

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