Do I Really Need Credit?

A question some people may ask themselves is, do I really need credit? Do I ever need to borrow money and have a credit score or credit history.

The answer to this is very simple, no, you do not need credit, but you may need a credit score, and a good credit score at that. And you do not need credit as long as you can pay for any purchases you make with cash, or a debit card.

And here is where it gets complicated, needing a credit score, and paying for all purchases with cash.

In the course of a day, week, or month, you may be able to pay for all purchases, food, transportation, bills, etc, with cash, but what if you wish to buy a car, a property, or some other large purchase. Can you just save up and pay for it outright.

In theory yes you can. However, the reality is that not many of us can save the fundss to pay cash for large purchases. We need the item now, or sooner than the time it would take us to save the money for it.

So we require a loan, which usually means, we need credit.

For the sake of this little written endeavour, let’s say you can pay cash for every purchase you make, including large expensive ones, such as a car or property, which means you do not need credit, but what about a credit score?

If you have never had credit, you may not have a credit score, or a high enough credit score, but what do you care, you can afford to buy anything.

There are areas credit scoring is used, that do not involve the lending of money.

For some insurance policies insurers may review the insured credit score as a part of the underwriting process. A person’s credit score can be used almost as a character reference to get to know someone, without really knowing them.

In addition, there are some jobs where employers check a prospective employees credit and credit score, as a part of the hiring process.

These jobs may include where an employee handles cash, or in some financial sectors such as banking and other lending fields.

So you don’t need credit, but you may need a credit score in order to qualify or be approved or hired.

There also is the world we live in today.

Many people shop online, even for food, and while you can make these purchases with a debit card, there are some rights and safety measures/protections in place should you use a credit card.

So having a credit card and using one for some purchases is good, but which also necessitates having credit.

In attempting to answer the main question of do I need credit, the reality is we live in a credit society, so even if you could pay cash for all purchases, having a credit score is sort of required. And as we move into a Social Credit Scoring world, in which credit scores are only a small part of what makes up our Social Credit Score, we may still need to have a credit score as a part of this new scoring system.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.