Bad credit ratings 'make borrowing even tougher'

Brits with bad credit ratings are likely to find it harder to get credit, according to new research.

A new report by Moneyfacts has revealed that consumers may find it harder to get credit as lenders increase their rates, and tighten up their lending criteria.

Michelle Slade, spokesperson at Moneyfacts.co.uk said: "Lenders have continued to tighten up their lending criteria, with only customers with blemish free credit records likely to be accepted for a personal loan.

"Those customers that are accepted are having to a pay an increasingly higher price."

Ms Slade added that new customers are likely to pay higher premiums to cover the defaulting customers who took out the previously more competitive rates.

Official figures show that unemployment is on the increase, and as a result, lenders may be worried that more customers are likely to default on their loan.