It is no secret, horse-riding and caring for horses is a costly endeavour. From stabling fees to horse-riding equipment, you will have to financially commit to your passion. 

If you have a bad credit score, it can be heartbreaking if you need to pay for vet’s bills or purchase new equipment in an emergency. The great news is that lenders are now much more amenable to lending to those with bad credit scores and this guide explains everything you need to know about bad credit borrowing.

Let’s discover financing your horse-riding equipment with a bad credit score.

What is a Bad Credit Score?

Your credit score is calculated on your financial history and in rare cases on your social standing. 

If you have missed payments, defaults, or County Court Judgements (CCJs) these will all negatively impact your credit score.

Your credit score can be significantly impacted if you are registered as bankrupt or have entered an Individual Voluntary Arrangement (IVA). This is because credit reference agencies will see that you have had extreme difficulties managing your finances.

Sometimes, you may have little or no financial history and this can raise concerns for lenders as they will not be able to assess the risk of lending to you. Having no financial history can also result in a bad credit rating for this reason.

How Are Credit Scores Calculated?

Credit scores are calculated by tracking your money management.

For example, if you repay your debts on time and keep up to date with your bills and utility payments it will show Credit Reference Agencies you are living within your financial means. Good money management will improve your credit score.

Poor money management on the other hand will reduce your credit score.

Your credit score is always fluid and will change over time according to how you are managing your finances currently.

Who Calculates Your Credit Score?

Credit scores are calculated by Credit Reference Agencies who use algorithms to determine your creditworthiness.

Each Credit Reference Agency has a different algorithm, and you may find some agencies have better credit scores for you than others. This can be advantageous to know as you may want to approach lenders who use a Credit Reference Agency that has a better credit profile for you.

There are three main Credit Reference Agencies in the UK:

• Equifax,
• Experian,
• TransUnion.

There is also a fourth Credit Reference Agency called Crediva, however most lenders only use Crediva as an additional agency rather than as their main credit scoring service. This is because Crediva calculates scores on your social standing such as being registered to vote and puts much less weight on your actual financial history.

How Do Lenders View Bad Credit Borrowers?

In general lenders are cautious to lend to bad credit borrowers. This is because there is a higher risk the loan won’t be repaid, and they will lose money.

Lenders have risk thresholds for lending money. For example, tight or strict lenders may only lend money to those with good or above credit scores.

Other lenders are more generous with their credit scoring and allow bad credit borrowers to apply for finance. You should be aware bad credit lenders typically apply a much higher interest rate compared to stricter lenders.

Your interest rate is effectively a penalty for the risk you represent to the lender. If your credit score is bad or poor, your interest rate will be higher than if your credit score is good or excellent.

Can I Finance Horse-Riding with Bad Credit?

Yes, you can finance horse-riding equipment with bad credit. You should be aware it is only a good idea to borrow money when you absolutely need to.

For example, non-essential borrowing for horse-riding is not advisable and you should instead set money aside each month until you have saved up enough to afford the horse-riding equipment.

Saving is always cheaper than borrowing. This is because the interest rates on borrowing are higher than the interest rates on savings. In short, if you borrow you will always be paying back much more than if you had saved the money instead.

There are times when you may need to borrow money. If this is the case, then there are several bad credit products available to you.

What Finance Products are Available with Bad Credit?

If you want to borrow money for horse-riding equipment with a bad credit score you will need to look at unsecured loans or if the equipment is not too expensive, you may be able to use a credit builder credit card.

Unsecured Loans with Bad Credit

These loans are designed for people with poor credit histories and typically have a high interest rate. They are suitable for mid to long-term borrowing and are comparatively cheaper than Pay Day Loans.

There are a range of bad credit lenders offering unsecured finance and some have more competitive interest rates than others.

Credit Builder Credit Card

Credit cards are great if your purchase is a lower value, and you can repay the amount quickly. The interest rates on these cards are normally more competitive than unsecured loans and Pay Day Loans, but you should be aware if you only make the minimum payments, you may find the total amount you repay much higher than alternatives.

Use the UK’s First Bad Credit Comparison Website

Irrespective of the type of product you use to buy your horse-riding equipment, you will want to make sure you get the best rate possible.

You may have heard about the UK’s first bad credit comparison site that allows borrowers to compare a large range of bad credit products and seek out the best interest rates.

The comparison website pre-approves you for any product you are interested in with a soft credit check so you can apply for your finance with confidence. Soft credit checks do not impact your credit score although most lenders will require a hard credit check when you make a full application.