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The problem of trying to get a bad credit loan is getting much worse for many borrowers. Although it has never been incredibly easy to get a bad credit loan, the housing crisis shed a harsh light on the subprime market and right now, there are very few lenders that are willing to offer a bad credit loan.

Ray Boulger with finance firm John Charcol stated, “Today, lenders are reluctant to accept minor blemishes in the way they did in the past. They are taking a more restrictive approach. We might look back at this moment and say this was the peak for gilt yields and therefore the peak in fixed-rate pricing,” he added. “And for lenders in a strong capital position, there is now a very good argument for increasing your lending to the maximum. The margins that they can obtain today are at a level they would have died for a year ago.”

Richard Morea, at London & Country Mortgages added, “Creditworthiness is playing a much more important part in lending decisions. It’s not so much income multiples they are clamping down on, it’s about proving your income. They are checking and scrutinising far more than in the past. If lenders are forced to charge lower fees, it’s likely that the underlying interest rate will rise.”

Related reading: Bad Credit Loan