If you want to borrow money then you should be aware of your credit score. This score is provided by credit reference agencies like Experian and Equifax. These are among some of the most reputed agencies that are involved in providing credit check facilities to lenders and borrowers all over the UK.

The UK financial market has evolved greatly over the past few years. Various new products and technologies have entered the market. Now, you can even apply for a loan from the comfort of your home. There is no need to go after the loan officers and request for an appointment. Even the lenders have become more liberal and they easily give loans to the borrowers. Those with bad credit score can apply for bad credit loans.

Personal loans are basically unsecured loans. With no collateral involved, it becomes imperative for the lender to check your credit history and repayment capability before proceeding to sanction a loan. This is done by asking for a credit report from the credit reference agencies. This report shows that how much a lender can depend on you and your creditworthiness in the market.

Lenders also consider your repayment capability before granting personal loans. This is usually calculated with the help of debt to income (DTI) ratio. The DTI ratio is expressed in percentage. It is arrived at by dividing your total monthly debt repayments by the amount of your total monthly income. A DTI ratio of up to 20 per cent is considered healthy. However, if you already owe about 40 percent of your income towards debt repayments, the lenders may either refuse you or may ask a high interest rate from you.

personal loans are available for bad credit borrowers. Although such loans involve a high rate of interest, but they are particularly helpful in getting money at the time of financial adversity. If your credit score is below 650 on a scale of 800, it is generally considered bad. As you go down the line, it deteriorates further.