Credit. Most people will not manage to go through life without using some form of
Credit. The exception to this may be the fortunate millionaires among us or those lucky enough to receive a large windfall of cash!
The vast majority of people will most likely need to apply for a mortgage, car loan or some other form of unsecured loan and sometimes due to circumstances beyond their control things dont go to plan and people fall behind on loan payments. If this situation occurs then your credit file is tarnished and obtaining credit through the mainstream high street lenders can be very difficult. There are however options for those that have experienced difficulties and that may have a poor credit profile, and the most popular way to do this is via guarantor loans
Guarantor loans are a new type of loan product which as the name suggests, use a guarantor to guarantee the loan. This improves the borrowers chances of obtaining credit as the credit profile of the guarantor is what really matters. If the borrower fails to pay the loan repayments then the guarantor would need to cover the payment.
Although lending to someone who has traditionally had problems could be seen as a risky strategy, without a product that allows someone to repair their credit profile a mentality of no second chances is created.
That said, if the borrower fails to keep up the repayments then its more than just their credit profile at stake, it could result in further action and ultimately the loss of a relationship.
Think carefully before pursuing this type of product it could easily help as long as the payments are maintained.